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 5. TRADE  6. GULF



Nov 12 - 18, 2001

Moody's upgrades Pakistan ratings

Moody's Investors Services the international rating agency raised Pakistan's country ceiling for foreign currency bank deposits, one notch from 'Ca' to 'Caa1'.

A statement issued from New York on Tuesday, jointly signed by the MD David H. Levey and VP-Senior Credit Officer at Sovereign Risk Unit of Moody's also said that the rating agency had confirmed its Caa1 country ceiling on foreign currency debt as well as the Caa1 rating on rupee-denominated government debt, and also raised the outlook on Pakistan's country ceilings and on government debt to stable from negative.

As a consequence of the bank deposit ceiling upgrade, the bank deposit ratings of the four banks currently rated by Moody's (Habib Bank, United Bank, National Bank and Muslim Commercial Bank) were raised to Caa1 and their deposit rating outlooks revised to stable.

NDFC amalgamated with NBP

The National Development Finance Corporation (NDFC) stood amalgamated with the National Bank of Pakistan from Thursday (November 1) following the approval by the government.

The government had placed a moratorium in August this year to amalgamate the NDFC with the state-run National Bank.

A total of 25 branches will become a part of the NBP network, which already has more than 1,300 branches nation-wide.

Debt relief sought from Japan

Finance Minister Shaukat Aziz has expressed gratitude to the Japanese government for lifting economic sanctions against Pakistan and providing it assistance to help offset the negative effects of the current volatile situation in the region.

In a meeting with Secretaries General of Japan's ruling coalition parties after arriving in Tokyo from Hong Kong, he said the post-Sept 11 events had hurt Pakistan's economy in the shape of reduced tax collection, falling exports and shrinking foreign investment.

Pakistan loan deal soon, hopes IMF

The International Monetary Fund said on Thursday it hopes to wrap up negotiations on a new poverty reduction loan for Pakistan soon.

"It is hoped that a financing package supporting the authorities programme is agreed soon and that the (poverty reduction loan) discussions can be wrapped up in the near future," IMF spokesman Tom Dawson told a news briefing.

"Good progress is being made," he said.

Dawson said it was premature to speculate on the size of the loan. Earlier this week, the US State Department said it would support a $2 billion IMF loan for Pakistan.

SBP makes one more cut in T-bills yield

The State Bank on Wednesday cut the treasury bills cut-offs by 1.64-1.81 per cent in a follow-up of a two per cent cut in discount rates on October 20.

This is the third cut in the treasury bills yield within a month. Earlier on October 3 and October 17 the SBP had made modest cuts in the T-bills yield.

The SBP slashed the cut-off yield from 10.28 per cent to 8.50 per cent on six-treasury bills and from 10.74 per cent to 9.10 per cent on one-year bills: it also reduced the maximum yield on three-month bills from 10 to 8.19 per cent.

SBP makes heavy dollar buying

The State Bank made heavy buying of US dollars from the inter-bank market last month to keep the greenback a bit stable for exporters.

Senior central bankers confirm dollar buying but none of them is ready to disclose the exact volume. Estimates vary. "The State Bank bought no less than $350 million," said one senior official who refused to be identified. He said $300 million were bought in ready and the rest in forward. Another official said total buying could be even higher.

Housing finance

Modarabas are ready to offer housing finance under the recently-announced scheme of the State Bank and the SBP authorities seem willing to allow them to do this.

"We sought permission of the State Bank to participate in the rediscounting house financing scheme and the State Bank Governor, Dr Ishrat Husain, told us he had no objection," said the chairman of Modarabas Association of Pakistan (MAP), Basheer A. Chowdry. He said the issue came under discussion on Wednesday when a delegation of the Association called on the governor.

Govt to inject Rs19m in FWB equity

The Ministry of Women Development and Social Affairs will inject an equity of Rs19 million in the First Women Bank.

A press release issued by the bank said that it was announced by Federal Minister for Women Development and Social Affairs Dr Attiya Inayatullah while presiding over a meeting of the FWB at its head offices on Wednesday.

HBL registers 30pc growth in September remittances

Habib Bank Limited, which handled around 40 per cent of Pakistan's $1 billion workers remittances last year, registered a growth by 30 per cent in remittances in September 2001.

The president of the Bank, Zakir Mahmood, addressing a press conference said the drastic improvement in Bank's working, efficient services, prompt delivery of remittances to the beneficiaries and narrowing gap between kerb and official exchange rate, which was same on Tuesday morning at Rs61.40, encouraged the overseas Pakistanis to use official channels to send money back home.

10 TFCs floated

For the private debt market, financial year 2001 reflected excitingly encouraging trend since as many as 10 new Term Finance Certificates (TFC) were floated during the year. These equalled the TFC offers in all of the last five fiscal years, combined.

The SBP while acclaiming the growth of the domestic debt market, said: "However, secondary market transactions in TFCs remained negligible as most of the investors prefer to buy and hold".

IMF, Paris Club to fill $8bn gap

The International Monetary Fund and the Paris Club have assured Pakistan to fill $8 billion financing gap during the next three years in order to provide a major relief to the economy of the country.

"We have reached a broad understanding with the IMF and the Paris Club for filling Pakistan's $8 billion financing gap through generous bilateral and multilateral support by 2004", said Minister for Finance Shaukat Aziz.

Govt to clear refunds by Dec 31: Rs12 billion claims

The government has decided to help increase the exporters' liquidity by assuring to clear their Rs12 billion refunds by December 31 this year.

"The Central Board of Revenue (CBR) has been asked to accelerate refunds, and pay Rs6 billion in November and another Rs6 billion in December to exporters so that their liquidity problem could be eased out to some extent," said Minister for Finance Shaukat Aziz.