He said that a number of bilateral agreements had
earlier been signed for $12.5 billion debts rescheduled by Paris Club
for 35 years with a grace period of 15 years.
The government considered re-profiling of $12.5
billion debt, a big achievement, as nearly 50 per cent of this debt
was due for payment by 2007. Then there were individual creditors who
committed to either cancel their debts or have shown their willingness
to swap them for social sector funding for up to $1.5 billion.
According to officials of the ministry of finance,
the full extent of relief would be measured once the country had
worked out all the bilateral agreements with bilateral creditors. But
based on rescheduling alone, a 30 per cent reduction in net present
value of outstanding stock of debt has been achieved.
With the addition of cancellation, debt swaps and
interest rate reduction, this figure was likely to rise to about 40
per cent of reduction in net present value.
The present government claims that over the past
three years, it had lowered the burden of the most expensive foreign
debt liabilities on Pakistan by nearly $2 billion from $38 billion to
$36 billion as on June 30 this year.
TWO EXCHANGE COMPANIES SET TO START OPERATIONS
NBP Exchange Company Ltd has got the State Bank
licence to work as a foreign exchange company and its management says
the company will start operations from January 1, 2003.
Chief Executive of H&H Exchange Company Ltd.
Haji Haroon said his company had also got the SBP licence adding that
the company would start operations sometimes next month.
NBP Exchange Company is a wholly owned subsidiary
of state-run National Bank of Pakistan and is set to start business
with a paid-up capital of Rs300 million.
RS220M FINANCING SYNDICATED
Saudi Pak Industrial and Agricultural Investment
Company has syndicated a term finance facility to the tune of Rs220
million to meet the cost of balancing, modernization, replacement and
expansion programme of Nina Industries Limited, one of the leading
export-based textile companies in Pakistan.
Led by Saudi Pak Industrial and Agricultural
Investment Company, the other participants of the new syndicate are
Saudi Pak Commercial Bank and Pak Libya Holding Company, according to
a company source.
ADB FINANCIAL MARKET PLAN
The Asian Development Bank is expected to finalize
and approve its financial market governance programme, aimed at
strengthening Pakistan's weak financial sector, next month.
This was stated by ADB representative in Islamabad
Mashruk Ali Shah while addressing a seminar on strengthening corporate
governance in Pakistan organized by the SECP in collaboration with
The ADB official said the FMG programme would help
alleviate poverty in the country by facilitating private sector-led
economic growth and generating jobs. He said the programme would also
help the financial sector mobilize resources on a long-term basis
through savings and investment.
CUT IN TBS RATE
The State Bank cut the weighted average yield on
six-month treasury bills to 4.76 per cent from the previous 6.34 per
cent. This paves the way for reducing the export refinance rate from
6.5 per cent in November to 5.5 per cent in December.
Senior bankers said the central bank mopped up
Rs24.4 billion against the target of Rs20 billion in an
out-of-schedule auction of T-bills. The SBP had to auction six-month
T-bills instead of three-month and one-year T-bills to lower the
export refinance rate which is linked with the weighted average yield
of six-month bills.
LOCAL BANKS BEGIN CREDIT MARKETING
Big banks with surplus liquidity are going to
launch a campaign for credit marketing. They have already started
renewing their relationship with large corporate customers.
Top business leaders say relationship managers of
large local banks including those in the public sector are making
frequent visits to business houses for this purpose.
"Relationship managers of National Bank and
Muslim Commercial Bank visited our business house and made a detailed
presentation on how best we can borrow from them," said a former
chairman of All Pakistan Textile Mills Association.
For Reckitt Benckiser — the fast moving consumer
goods company (FMCG) that makes household and pharmaceutical products
(mortein, veet, dettol, disprin, robin blue, air wick, cherry blossom,
disprol and others) — the staggering loss of Rs213 million suffered
in 1999 is now a distant memory. That was the first deficit ever
encountered by the company.
The 81st board of directors meeting of Saudi Pak
Industrial and Agricultural Investment Company Limited approved a
total financing of Rs490 million to 13 companies in manufacturing
services and financial sectors.