Jan 29 -
Feb 04, 2001
Islamabad seeks $2 billion from IMF
Pakistan is seeking $2 to 2.5 billion poverty
reduction growth facility (PRGF) from the International Monetary Fund
(IMF) to replace the current $596 million standby arrangement (SBA),
which is expiring in September this year.
"The government is negotiating a three-year
PRGF programme relatively on less mark up rate and we hope to qualify
for that new programme", said finance ministry spokesman Dr Waqar
Briefing reporters on Thursday he expressed the
hope that the government's difficulties would not increase when the
ten months period of loan restructuring by Paris Club ended in
"We may not require funds for our balance of
payment problems if we succeed to have PRGF", Dr Khan said,
adding that so far the Club has restructured loans worth little over
He did not offer any comment when asked what would
happen in September when another rescheduling will be required by
Pakistan from the Club, keeping in view the still fragile balance of
payment position. When pressed he said there was nothing on cards
except to seek PRGF to meet with the future situation.
The additional secretary told a reporter that the
State Bank had purchased $1.7 billion from the market in 1999 to avoid
default on repayments of loans to foreign creditors.
Responding to a question he said Pakistan was not
seeking from the IMF downward revision of various economic indicators
set for the current financial year. He agreed that the budget deficit
was still higher than the target of 4.3 per cent agreed with the IMF.
"But we have no plan to seek any revision of
various targets which are otherwise expected to be achieved by the end
of 2000-2001", he added.
Answering a question he said he could not give the
exact budget deficit figure as final numbers have not been received
for the first six months of 2000-2001.
Forex reserves under pressure
The foreign exchange reserves are coming under
mounting pressures as bankers report a fall of 73 per cent in the
foreign investment flow during the first half of current fiscal year,
decline in the remittances for third consecutive month and increase in
the trade imbalance to $938m.
Total foreign investment flow amounted to $74.7m
during the last six months as against $276.6m in the first half of
last fiscal. The outflow of portfolio investment gained pace, as
bankers report a total withdrawal of $67.4m this year, as against
$29.4m outward remittance in last fiscal.
Haemorrhage in portfolio investment has come mainly
from the European countries as Swiss investors withdrew $22.5m and
British called back $20.6m. The USA investors too, pulled out $9.3m.
$170m sold to banks
The State Bank of Pakistan, on Monday, sold back in
the inter-bank market, about $170m it had bought from some banks in
Bankers said banks paid more than Rs 10bn to the
SBP to buy back $170m they had sold at the year-end to generate rupee
funds. This pushed up overnight lending rates by 1-1.5 per cent.
Bankers said overnight funds were available at
11-13 per cent up from 10-11.5 per cent on Saturday. One-week funds
were lent at 12 per cent, up from 11.5 per cent at the weekend.
Bankers said the rupee closed at 59.13/59.18 to the
dollar in the inter-bank market showing little change over the weekend
close of 59.12/59.17. They said despite outflow of Rs 10bn, most banks
met their borrowing needs within the inter-bank market and only a
couple of small banks had to borrow overnight funds from the SBP.
PTCL: Pakistan Telecommunication Company
Limited (PTCL) posted an after tax profit of Rs7,156 million for the
half year ended December 31, 2000.
ICP: Investment Corporation of Pakistan (ICP)
posted an operating profit of Rs35 million for the financial year
1999-2000, compared with an operating loss of Rs217 million incurred
the previous year.
PNSC: Pakistan National Shipping Corporation (PNSC)
has sunk deeper into deficit. The latest accounts for the year ended
June 30, 2000 showed that a pretax loss of Rs 488.5 million had been
sustained by the national flag carrier. Pretax loss last year amounted
to Rs 116.2 million.
Tax rate slashed
The federal government is considering reduction in
tax rates on bank profits from 58 per cent to 43 per cent. This step
is being taken in view of the present tax rate rendering the banking
business unfeasible, say official sources.
Govt borrows Rs 5.3bn
The Sate Bank on Wednesday raised short term debt
worth Rs 5.3 billion for the government through sale of treasury
Bankers said SBP sold Rs 5 billion worth of
three-month bills at a maximum yield of 10.5 per cent and Rs 353
million worth of six-month bills at 10.95 per cent.
Consortium for financing arrangement
National Bank of Pakistan has entered into an
agreement with Sui Southern Gas Co for arranging and advising the gas
company's term finance certificate issue of Rs3 billion.
NBP has joined hands with Standard Chartered Bank
and Khadim Ali Shah Bukhari & Co to form a consortium for the
financing arrangement. The proceeds of this issue will be utilized to
finance a portion of the company's Gas Infrastructure Expansion
$17.15m International Fund
A United Nations farm development body said on
Tuesday it would provide a loan of $17.15 million to Pakistan to help
boost farm projects along its border with Afghanistan.
The International Fund for Agricultural Development
(IFAD) said the loan would be used to finance a $21.86 million scheme
called the "Southern Federally Administered Tribal Areas
IFAD said that to date they had financed 17
projects in Pakistan in loans totalling $298.5 million.
Taiwan to invest Rs300m
Taiwan has decided to invest in Pakistan by setting up a Cone Dying
& Bleaching Unit in Kotri at an estimated cost of Rs300 million,
said Mr Jackson Cheung, Leader of Taiwan Trade delegation.