Dec 10 - 16, 2001
Govt asks banks to cut lending rates
A high-level meeting on Wednesday directed the
commercial banks to reduce their interest rate as the State Bank has
already cut its discount rate by 4 per cent.
The meeting, chaired by Finance Minister Shaukat
Aziz and attended by Governor State Bank, Dr Ishrat Hussain was of the
view that there was no justification for commercial banks not to
reduce their mark-up rate specially when the central bank had
considerably cut its discount rate.
Official sources said that the meeting noted that
since lending rates were not being reduced by the commercial banks,
business community was reluctant to take part in any meaningful
business activity despite various incentives already providing to it
by the government.
The meeting especially directed the presidents of
Nationalised Commercial Banks (NCBs) to take a lead in reducing their
interest rate so that other commercial banks, both local and foreign,
could also be asked to follow the same.
"The reduction in lending rate is necessary to
stimulate growth and attract investment in the country," the
finance minister was quoted as having said in the meeting.
The sources said that the governor, State Bank also
said that banks' interest rates were needed to be rationalized
specially after the reduction in the discount rate of the central
bank. The State Bank had reduced its discount rate by 4 per cent
during July to October this year.
The sources said that the meeting was told that
central bank's intervention was necessary to have an aggressive
monetary policy for increasing private investment.
Generally, it is alleged that inefficiency in the
commercial banks and lack of harmonious discount rate were the major
causes of having low private sector investment in the country.
Germany to give DM300m aid
Germany has decided to offer DM300 million
assistance to Pakistan which included DM100 million for debt swap.
This debt swap is for two years, and as such DM50
million will be offered this year and another DM50 million will be
made available next year. The amount of debt would now be spent for
Also, the new German aid included DM75 million of
fresh loan/grant for economic assistance as well as DM110 million for
reprogramming of old assistance. This was decided in Bonn on Wednesday
during negotiations between finance minister Shaukat Aziz and German
Great potential for investment in oil, gas sector
Minister for Petroleum and Natural Resources, Usman
Aminuddin said on Wednesday oil and gas sector offered a host of
investment opportunities and widespread potential for the foreign
investors, and Pakistan would welcome Chinese participation in
He was talking to a seven-member delegation from
Chinese National Oil and Gas Exploration and Development Corporation (NOCDEC)
headed by its Vice President Madam Wang Shali.
They discussed matters pertaining to investment
opportunities in Pakistan's oil and Gas sector.
SBP buys $900m from banks
The State Bank purchased at least $900 million from
the inter-bank market in the last two months. Bankers close to SBP
said the central bank bought a small part of the amount in forward but
they could not quantify it.
The State Bank statistics released on Thursday put
the total liquid foreign exchange reserves at $4.4 billion as on
December 1. Of this, the SBP held $2.8 billion and all the banks $1.6
PSO declares 60pc final dividend
The Pakistan State Oil (PSO) distributed final
dividend of 60 per cent or Rs six per share during 2000-2001.
PSO's sales in 2000-2001 rose by 25.7 per cent and
the company earned a record gross profit of Rs6.4 billion, up by 12.4
per cent over the preceding year, says a PSO press release.
The rupee gained 25 paisa for selling in the
inter-bank market on Thursday and closed at Rs60.62/60.67 per dollar
against the previous close of 60.90/60.92.
Senior bankers said the rupee rose due to higher
inflow of export proceeds amidst low demand from importers.
Millat Tractors acquires Rex Barren
Millat Tractors Limited, the producers of Massey
Ferguson brand of tractors, have acquired the assets of Rex Barren
Batteries Limited for Rs13.55m, by making the highest bid at the
auctioneers — the Corporate & Industrial Restructuring
PARCO floats Rs2.5bn TFCs
Pak-Arab Refinery Limited (PARCO) has floated its
first public issue of term finance certificates worth Rs2.5 billion.
Of the total issue, Rs2 billion has been subscribed
by banks, financial institutions and provident funds. The initial
public offer (IPO) of Rs500 million will be available for subscription
on Dec 12, 2001.
$54.77m paid as WRP in two months
In a short period of two months, the country had to
pay a huge amount of approximately $54.77 million as War Risk Premium
(WRP) imposed by the foreign shipping lines since Oct 1, 2001,
Despite the fact that there had never been a risk
in the shipping lines nor at the two ports — Karachi Port and Qasim
port — the foreign shipping lines had exorbitantly imposed surcharge
ranging from $100 to $200 per TEU and $4 to $5 per ton for bulk cargo.
Taking into account the annual turnover of bulk
cargo and containers traffic at the two ports, a poor country like
Pakistan in a short period of 60 days had already paid around $54.77
million towards war risk premium, exporters lamented.