The twin move has made it very difficult for
the banks to continue to invest surplus funds in government securities
and they are now finding ways to lend more to the private sector.
Bankers say that the Rs12 billion fresh credit
disbursement in the last two weeks of October was due to seasonal pickup
in credit demand mainly on the back of cotton financing. They say that
with the start of sugarcane crushing last month the private sector
credit would show an upward movement in November onwards adding that the
rate cuts would also increase credit offtake as banks have started
offering cheaper loans to selected clients after November 16.
The credit plan for this fiscal year envisages Rs94.7
billion credit for the private sector but at the end of October net
credit offtake was still at minus Rs798 million. But despite the net
credit being still negative the last two weeks of October saw Rs12
billion fresh borrowing from the private sector due to a pickup in
Bankers say that net credit to private sector has
been on the rise from November onwards but statistics are yet to pour in
as the banks take some time in compiling credit data from across the
But they say that the target of Rs94.7 billion may be
missed as they do not foresee any dramatic increase in private sector
credit demand. The new democratic government that has retained two key
economic managers of the military regime is following the economic
policies of the past which Pakistan had to formulate in conformity of
the IMF-World Bank prescriptions.
GAS PROJECT: FRAMEWORK ACCORD TO BE SIGNED ON 26TH
Pakistan, Afghanistan and Turkmenistan will sign a
tripartite Gas Pipeline Framework Agreement at a summit meeting in
Ashkabad on Dec 26-27 to formally launch the $3.2 billion
Trans-Afghanistan Pipeline Project, a senior government official said
this the other day.
"Subject to confirmation of dates by the heads
of the states, the tripartite summit would take place in Ashkabad on Dec
26 to sign the agreement," secretary petroleum M. Abdullah Yousaf
It was, however, unclear yet whether the president or
the prime minister would represent Pakistan at the Ashkabad summit, said
the secretary petroleum who had a meeting at the prime minister
Accordingly, a steering committee meeting scheduled
for Dec 16-17 in Islamabad is being postponed till February next year.
"The steering committee meeting is now likely to be postponed till
February next year," he confirmed.
IMF WANTS REFORMS TO CONTINUE
The International Monetary Fund believes that the
present government must have a strong political will to sustain the
ongoing reform agenda relating to devolution, civil service, tax policy
and public financial management.
Sources in multilateral agencies said that IMF was
very much concerned whether the present government will be able to
implement reforms initiated by President Gen Pervez Musharraf.
The new government, sources said, was being expected
to fulfil all the conditionalities attached to three years $1.3 billion
Poverty Reduction Growth Facility.
Pakistan has already acquired four instalments of the
PRGF and fears were being expressed that remaining tranches could be
withheld in case the new government continued what was termed
"relaxing the conditionalities on its own".
ONE DESK OPERATION
Industries and Production Minister Liaquat Ali Jatoi
has said the government intended to set up "one desk
operation" to provide facilities to local and foreign investors.
"I will get the approval of setting up the one
desk operation from the cabinet in the next meeting," he recently
told a large gathering of businessmen and industrialists at the head
office of Site Association of Industry.
Prime Minister's Adviser on Finance and Economic
Affairs Shaukat Aziz has estimated a backlog of 5.38 million housing
units in the country which represent a big demand for housing finance
and calls for an active role of banks.
Inaugurating a two-day Housing Finance Conference
organized by the State Bank of Pakistan recently, the adviser has
estimated total housing finance demand close to Rs68 billion if
commercial banks design products for construction of at least
half-a-million housing units every year in the country.
Prime Minister's Adviser on Finance Shaukat Aziz said
that foreigners' traffic to Lahore and Islamabad had somewhat improved
lately, but Karachi remained a problem city mainly because of a negative
Responding to a question in a businessmen meeting of
Karachi Chamber of Commerce and Industry, the adviser said the
government was pursuing hard to erase a negative image of the country
created by 'no travel advices' to Pakistan by some of the governments to
their respective nationals.
KHATAMI MAY VISIT THIS MONTH
Iran's reformist President Mohammed Khatami is
expected to visit Pakistan by the end of this month, informed sources
told this the other day.
Foreign Secretary Riaz Khokhar and Additional
Secretary Aziz Ahmed Khan left for Tehran to extend to the Iranian
President a fresh invitation from the newly elected government.