Dec 17 - 30, 2001
Paris Club provides $12bn relief package
The Paris Club on Thursday offered a $12 billion
"stock re-profiling" of loans for 38 years under which
Pakistan would have to pay nothing in debt servicing during the first
"Pakistan is the fourth country after Egypt,
Poland and Yugoslavia to get this unprecedented package from the Paris
Club," Finance Minister Shaukat Aziz told from Paris.
He described the offer as "beyond
expectations" and "something amazing and incredible".
He said that since Pakistan was implementing its economic reform
programme, the Paris Club decided to favour it in a big way to help
lessen its debt. "This all happened due to restoration of our
"The stock re-profiling of debt for 38 years
will eventually provide us 30 per cent debt write-off," the
minister said, adding the agreement included $0.5 billion loans
write-off and debt swap by Canada, UK, Italy and Germany.
"Now our cash flow will greatly improve which
will provide us an opportunity to look after our neglected social
sectors adequately," he pointed out.
According to a finance ministry announcement, the
total stock of debt affected by this arrangement is in excess of $12
billion. Two-thirds of this debt relate to concessional lending, and
will be rescheduled over 38 years, including a 15-year grace period.
The remaining involves guaranteed commercial debt, and will be
rescheduled over 23 years, including a 5-year grace period.
"This reorganization differs from Pakistan's
previous rescheduling agreements not only in that it treats the entire
stock of eligible debt, inclusive of previously rescheduled debt, but
also in that the repayment terms for concessional loans are nearly
twice as favourable as in previous arrangements".
Cash flow savings during the life of the recently
approved 3-year IMF Poverty Reduction and Growth Facility are
estimated at $2.7 billion, with significant savings during the
subsequent decade, thereby removing the spike in debt service
Slight increase in POL price likely
The Oil Companies Advisory Committee (OCAC) may
find it difficult to decrease the petroleum prices for the fifth time
in a row on December 15 owing to slight upward trend in global crude
oil prices in the current fortnight as compared to previous period.
Refinery operators and oil analysts said the
average price of crude fluctuated between $18-20 per barrel in the
last 12 days as compared to average price of $19 per barrel during
They said the average increase in oil prices came
to $19.12- $19.20 per barrel as compared to $19 per barrel in the
previous fortnight which might compel the oil marketing companies (OMCs)
to pass on the increase to general consumers. However, the
exchange-rate parity remained stable. On some occasions, rupee gained
its position by 10-15 paisa against the greenback.
Banks recover Rs3.3bn in July-Oct
Banks recovered about Rs3.3 billion worth of
defaulted loans of Rs1 million and above between July-October this
year. Specialized banks and development financial institutions (DFIs)
also recovered Rs376 million from their loan defaulters of Rs 1
million and above.
Bankers said these recoveries included cash
recovery from, and restructuring of, the defaulted loans. They said
the pace of recovery was a bit slow in October. Up till September
banks had recovered about Rs2.6 billion and DFIs Rs305 million only.
In October banks recovered Rs700 million and DFIs Rs71 million.
Reserves rise to $4.456bn
Pakistan's liquid foreign exchange reserves stood
at $4.456 billion on December 8, according to the State Bank
statistics released on Thursday.
Of this $2.842 billion was held by the State Bank
and $1.614 billion by all other banks.
A spokesman for the central bank said Pakistan
would receive on December 20, $86 million from the IMF as first
tranche of the $1.3 billion poverty reduction and growth facility. The
IMF had approved the three-year PRGF on December 7.
At end-September, Pakistan had $3.3 billion liquid
reserves of which $1.7 billion was held by the SBP and $1.6 billion by
all other banks.
The Pak-Arab Refinery Limited (PARCO) Rs2.5 billion
term finance certificates (TFCs) have been "comfortably"
over-subscribed, the company said in a statement on Thursday.
SBP cuts yield on T-bills
The State Bank on Wednesday cut the maximum yield
on treasury bills by 13 basis points to 8.16 per cent for six months
and by 29 basis points to 8.54 per cent for one year.
In weighted average terms, the SBP lowered the
yield by 12bps and 20bps respectively on six-month and one-year
T-bills. So far this fiscal year the central bank has cut the weighted
average yield of six-month and one-year bills by 4.4 per cent and 3.4
per cent respectively.
Gammon profit down
Gammon posted pre-tax profit of Rs12.5 million for
the year, down from Rs26.2 million the previous year. Profit after tax
stood considerably reduced to Rs0.3 million, from Rs4.4 million in
MLC posts loss
MacDonald Layton & Company has posted loss of
Rs2.5 million, down from loss of Rs11.1 million last year. Against nil
income in 2000, the company also managed to complete work of the value
of Rs47.5 million during the latest year and earn a profit of Rs8
million on contract.
The directors of Treet Corporation Ltd, which made
a pre-tax profit of Rs94.376 million in the year ended June 30, 2001 ,
have recommended 50 per cent — or Rs5 — cash dividend per share of
Rs10 each for the shareholders.