Mar 25 - 31, 2002
Remittances reach $1.3bn in 8 months
Overseas Pakistanis sent back home a little more
than $1.3 billion during the first eight months of this fiscal year
(July 2001-February 2002). In the same period of last fiscal year they
had sent only $637 million.
The State Bank said on Monday that home remittances
including encashment of foreign exchange and foreign currency bearer
certificates as well as Hajj remittances totalled $1.317 billion
between July 2001-February 2002. The SBP said in a press release that
in February 2002 Pakistan received $236 million up 202 per cent over
the $78 million home remittances received in February 2001.
The cumulative remittances of $1.317 billion
received in the first eight months of this fiscal year also shows an
increase of about 107 per cent over the $637 million remittances
received in the same period of last fiscal year. The pace of home
remittances picked up after the tightening of anti-money laundering
laws in the US and elsewhere in the wake of the September 11 events.
The remittances that are the second largest source
of foreign exchange earning after exports have been on the rise also
due to narrowing down of the difference between the inter-bank and
open market exchange rates.
Before September 11, 2001 the spread between the
inter-bank and open market exchange rates had been more than Rs2 per
dollar but it slid to a few paisa by the end of last month.
When the difference between the two rates was high
overseas Pakistanis were suffering losses in sending money back home
through legal channels. The falling gap between the inter-bank and
open market rates has saved them from booking such losses and lured
them into remitting money through banks rather than through hundi.
WB to give $350m by June end
The World Bank will provide $350 million Structural
Adjustment Credit (SAC-2) by June 30 this year to help improve
Pakistan's Balance of Payment (BOP) position.
According to sources in the local multilateral
agencies, the amount of SAC-2 could be a little higher and will be
disbursed as a "single tranche", like that of SAC-1 that
amounted to $350 million. The SAC-1 was disbursed in August, 2001.
Quite like SAC-1, SAC-2 also carries just 0.7
service charges to be offered from the International Development
Agency (IDA) window. However, the World Bank expected the government's
social spending targets to be in line with the Poverty Reduction
Strategy Paper (PRSP) prepared with the help of major international
donor agencies. The sources said the World Bank had also indicated
making available additional funds for health and education.
National Accountability Bureau (NAB) has recovered
Rs59 billion from bank defaulters and Rs2 billion on account of
corrupt practices from government functionaries. This was disclosed by
NAB chairman Lt-Gen Munir Hafeez at a meeting on "Performance of
NAB and its future" at NIPA on March 14.
Banks to refer Rs55bn default cases to CIRC
Four leading nationalized financial institutions
are expected to refer shortly around 431 fresh default cases worth
Rs55.767 billion to the Corporate Industrial and Restructuring
Corporation (CIRC) for restructuring and auction.
Official sources told that these include 198 cases
worth Rs28.799bn against which suits have been filed but not decreed
and hearing has been executed in 233 cases worth Rs26.968bn.
NCBs lending rate moves up
Weighted average lending rate of the three
state-run banks (namely National Bank, Habib Bank and United Bank)
inched up from 13.78 per cent at end-December 2001 to 14.08 per cent
at end-January 2002.
Senior bankers involved in interest rate management
attribute it to faster repayment of low-cost loans at the year-end.
"The weighted average lending rate of state-run banks has risen
due to faster recovery of loans," said chief financial officer of
one of these banks. State-run banks restructure and reschedule their
non-performing loans more in December than in other months. They also
make more cash recoveries at the year-end. "This lowers the
weightage of low-priced loans in overall lending rate structure and
makes the average lending rate look a bit higher in January."
KSE gives impressive figures
Net foreign portfolio investment was recorded at an
impressive Rs1.131 billion in February, reflecting a 23-month high
point, figures released by the Karachi Stock Exchange on Monday
But while certain market players were celebrating
the return of the foreign investor, others poked holes in the method
of collection of foreign investment data by the bourse and hence its
Banks to get $318m FCY deposits back
From next month the State Bank would start
returning to the banks more than $318 million foreign currency
deposits that they had placed with the SBP and got their rupee
The SBP issued a circular to all banks on Monday
telling them that from April 1 they would not be required to surrender
to the central bank the foreign currency deposits raised by them under
the scheme called F.E. 31.
Japan likely to cut interest: Shaukat
Finance Minister Shaukat Aziz said on Saturday the
new joint Japanese-Pakistan Economic Forum, set up during President
Musharraf's visit, would consider new Official Development Assistance
(ODA) for Pakistan and the reduction of interest rates on Japanese
loans to Pakistan. Shaukat, who flew in directly from Tokyo to New
York en route to Monterey, Mexico, to attend the global conference on
Financing for Development told: "We have asked the Japanese
government and it has agreed to consider reduction in interest rates
on loans given to Pakistan," and added: "They (Japanese
government) cannot write off debt; it's not in their