Dec 03 - 09, 2001
Drug prices up by 3 to 4 per cent
The federal cabinet on Wednesday approved a 3 per
cent increase in the prices of essential drugs and a 4 per cent jump
in those of decontrolled category.
The cabinet approved the prices of the drugs on the
recommendation of the ministry of health.
Federal Health Minister Dr Abdul Malik Kasi told
that the increase in medicine prices was due for quite some time.
"The government has increased the prices keeping in view the
interests of both the consumers as well as the manufacturers," he
He said the Pharma Bureau, a representative body of
drug manufacturers, had been asking for an upward revision in prices
due to a rise in utility tariffs, cost of different raw materials and
devaluation of the Pakistani currency.
When pointed out that the increase would hit the
consumers hard, the minister said the pharmaceutical companies had
been demanding a 12 per cent jump in drug prices in keeping with a
formula allegedly agreed between them and the previous PML government.
However, the government allowed 3 per cent increase in the controlled
category and 4 per cent in the decontrolled one, he said.
The minister, however, declined to comment whether
this increase would remain effective for a year or more. Meanwhile, Dr
Inamul Haq, ex-director general health, when asked to comment on the
across-the-board raise in drug prices, said it was not justified as
there were many raw materials the import prices of which had been
increased, but there were many also the prices of which had been
He said the prices of drugs should be increased on
case-to-case basis by calculating the actual impact of the imported
inputs and other overheads instead of an across-the-board raise.
He claimed that the profitability in the majority
of drugs available in the market was 50 per cent or thereabouts.
Therefore, this ad hoc price increase was not justified.
Reserves rise to $4.319bn
Pakistan's liquid foreign exchange reserves stood
at $4.319 billion on November 24, up from $3.621 billion a week
The latest State Bank figures released on Thursday,
shows that the total $4.319 billion reserves included $2.742 billion
held by the SBP and $1.577 billion held by the banks.
The reserves had got a major boost on November 20
when the US gave Pakistan $600 million aid as part of a $1 billion
package for its support to US-led war in Afghanistan. The inflow of
$600 million had raised the reserves to the highest ever mark of
$4.217 billion on November 20. Bankers said what added $102 million
more to the reserves in next four days bringing the total reserves to
$4.319 billion was SBP's dollar buying from banks.
Govt gains most from discount rate cut
The government has benefited most from a four per
cent cut in the State Bank discount rate so far this fiscal year.
Senior bankers say the government has raised Rs90
billion or so from the banking system by selling treasury bills during
July- November 2001 though its net borrowing has been less than 50 per
cent of this amount.
They say the cut in the discount rate followed by
lowering of treasury bills yield reduced the government's cost of
Whereas the central bank cut the discount rate from
14 to 10 per cent since July, it lowered the maximum yield on
three-month and six-month T- bills by 4.20 per cent to 7.9 per cent
and 8.3 per cent respectively. The yield on one-year T-bills also fell
by three per cent to 8.9 per cent. This huge fall in the treasury
bills yield has sharply cut the government's cost of borrowing but it
is difficult to work out how many billions of rupees the government
has saved on interest payment.
SBP sells Rs10.2bn T-bills
The State Bank on Wednesday sold only Rs10.2
billion worth of treasury bills of different maturity against the
target of Rs21.2 billion.
Bankers said the central bank sold below the target
amount of treasury bills to let banks keep part of the Rs20 billion
plus inflow due in the market on Thursday. They said this gesture of
easing of the liquidity crunch helped the bank square their positions
and no discounting took place on Wednesday.
Rupee up in kerb
The rupee gained 10 paisa more against the US
dollar in the open market on Thursday and closed at 61.20/61.40 for
spot buying and selling against the previous close of 61.30/ 61.50.
The State Bank has asked the banks to see if they
can set a benchmark of lending rates for their customers. And the
central bank has sought a report on this subject from a sub-committee
of Pakistan Banks Association headed by country manager of ABN Amro
Naveed A. Khan.
Sources close to the committee say some committee
members are of the view that instead of linking the customers lending
rates to the SBP discount rate of treasury bills rate the banks should
introduce their own prime lending rates. But opinions are still
divided on it.
On Monday, National Tanneries of Pakistan Limited
unveiled financial figures for the latest year ended June 30, 2001,
posting 10 per cent improvement in sales to Rs301.3 million, from a
year ago sales at Rs274.4 million. Profit before tax, nonetheless,
slumped by 13 per cent to Rs6.0 million, from Rs6.9 million.
The Exide Pakistan Limited had recorded 7 per cent
growth in operating profit to Rs60.7 million for the year ended March
31, 2001, from a year ago operating profit at Rs56.5 million.
Shell Gas LPG
The Shell Gas LPG posted pre-tax profit of Rs19.5
million for the year ended June 30, 2001, which was at about the same
level as last year. After tax profit, improved 23 per cent to Rs19.2