Nov 19 - 25, 2001
Pakistan, US sign $600m agreement
Pakistan and the United States on Thursday signed
an agreement under which Washington would provide $600 million in
direct budget and balance-of-payments support to Islamabad.
Agreement to this effect was signed by Economic
Affairs Division Secretary Nawid Ahsan and US Ambassador to Pakistan
Wendy Chamberlin. Finance Minister Shaukat Aziz attended the ceremony.
The ambassador also detailed the "billion
dollar plus" package for the people of Pakistan. She said that
President George W. Bush had announced an over $1 billion aid package
for the people of Pakistan when he had met President Gen Pervez
Musharraf in New York on Saturday.
Today, the ambassador said, they signed a
memorandum of agreement to provide an important piece for that
"one billion dollar plus" package. "It is $600 million
and over Rs36 billion in grant aid," she added.
The ambassador elaborated that it was a grant aid
for direct budget and balance-of-payments support to assist Pakistan
in its foreign exchange needs, adding the US was helping Pakistan to
get out of its debt trap and "we are encouraging others in the
Paris Club to do the same".
Ms Chamberlin said that Rs36 billion would help
Pakistan in its social sector priorities, including education, job
creations and health.
She said the US was impressed with the strong
support extended by Pakistan to the international community in its
fight against terrorism.
She said the aid was being provided to support the
government's reform agenda and to mitigate the impact of the economic
downturn on the Pakistan economy.
Fuel prices cut
The Oil Companies Advisory Committee (OCAC) on
Thursday reduced the prices of diesel and petrol by Rs1.50 and 60
paisa per litre, respectively.
The new prices will remain effective during the
fortnight starting on Nov 16 (Friday).
The OCAC also cut the prices of other petroleum
products by 1.78 to 4.42 per cent. Diesel will be available at Rs15.09
per litre, down from Rs16.59 per litre sold until Thursday.
Petrol can be filled at Rs29.66 as against Rs30.26
per litre — the rate of the just-ended fortnight.
The new price of HOBC is fixed at Rs33.71 as
compared to Rs34.32 per litre, while kerosene will now cost Rs14.40
per litre from Rs14.94 per litre. Light diesel oil prices have been
reduced to Rs13.40 per litre from Rs14.02 per litre, while JP-4 will
cost Rs13.58 per litre as compared to Rs14.11 per litre.
Creditors to bridge $3.2bn financing gap
Pakistan's $3.2 billion financing gap for 2001-2002
will be jointly bridged by the IMF-led bilateral and multilateral
creditors and a decision in this respect is expected to be taken by
the Fund's executive board in the first week of December.
Pakistan has been assured by the United States that
its $8 billion financing gap during the next three year period will be
met by bilateral and multilateral donors, official sources told on
Pakistan was told that since it offered necessary
support to US-led coalition to fight against terrorism, Islamabad's
short- and long-term financial requirements will be adequately met.
And in the first place, Pakistan's current year $3.2 billion financing
gap will be filled to ease pressure on its balance of payment
Paid-up capital limit raised
The Securities and Exchange Commission of Pakistan
(SECP) has directed the non-life insurance companies to raise their
paid-up capital to a minimum of Rs50 million by Dec 31, 2002 and to
Rs80 million by 2004.
$ falls as forward buying suspended
The US dollar that had shot up to Rs62.60 in the
kerb market on Wednesday fell to Rs61.60 on Thursday as speculators
made panic-selling and also suspended forward buying/ selling for the
The greenback closed at Rs61.40/61.60 for spot
buying and selling on Thursday against the previous close of
Reserves inch up to $3.619bn
Pakistan's liquid foreign exchange reserves inched
up to $3.619 billion on November 10 from $3.607 billion on November 3.
The State Bank statistics released on Thursday show
that the forex reserves held by the central bank rose to $2.041
billion from $2 billion a week ago. But the reserves held by all other
banks that stood at $1.605 billion on November 3 fell to $1.578
billion on November 10.
Japan to give $300m more grant
Japan decided on Wednesday to provide fresh aid
worth $300 million to Pakistan in light of Islamabad's contribution to
the war on terrorism, reports said. Japan plans to offer the grant aid
to Pakistan over the next two years in addition to the $40 million
grant pledged in September, Jiji Press and Kyodo News agencies said,
quoting government sources.
T-bill yields cut again
The State Bank on Wednesday slashed the cut-off
yield on treasury bills by 11-23 basis points and sucked in Rs7.5
billion from the inter-bank market. Earlier on October 31 the SBP had
cut the yield on T-bills by 1.64-1.81 per cent in a follow up of a two
per cent cut in its discount rate announced on October 20.
Pakistan and Sweden on Tuesday signed a debt
rescheduling accord worth $51.320 million for repayment in 30
semi-annual instalments, from Nov 1, 2004.
First Grindlays Modaraba announced cash dividend at
33 per cent for the year ended June 30, 2001, up from 30 per cent paid
earlier year. The Modaraba also announced net profit reflecting 10 per
cent growth over last year; operating income at over Rs1 billion and
recorded highest lease disbursements of Rs966 million.