Pakistan may get extra $4.5 bn from IMF: The News

By Mehtab Haider

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have discussed options for additional funding of $4.5 billion for Islamabad and the final decision will be taken in review talks in Dubai scheduled from May 4 to 11, a senior official confirmed to The News on Wednesday.

The official, who was part of Pakistani delegation during the recent annual spring meeting of the IMF and the World Bank, told this scribe on late Tuesday night that Pakistan and the IMF had discussed options to jack up additional funding for Islamabad up to $12.1 billion from the existing $7.6 billion under a 23-month Standby Arrangement (SBA) program. When contacted Additional Finance Secretary, Asif Bajwa, who is also official spokesman, on Wednesday confirmed that the government had not yet formally approached the IMF on the issue of additional funding from the Fund.

An IMF official also confirmed that the government had not yet officially requested the Fund for additional funding. However, the sources said the IMF funding is meant for Balance of Payment (BoP) support and if the government decides to get additional funds, it will help the State Bank of Pakistan (SBP) to improve its foreign currency reserves position. “The government will put additional funding into the foreign currency reserves which will help to improve confidence of investors for having increased foreign currency reserves,” added the official.

Though the Friends of Democratic Pakistan (FoDP) had pledged $5.28 billion during Tokyo’s conference translating pledges into a reality was altogether a different matter. If these pledges are actualised, then Pakistan’s budgetary gap for the next two years can be filled.

For more on this article, please click on the following link: Pakistan may get extra $4.5 bn from IMF: The News

Govt plans to sell stakes in 3 companies this year: Qamar: Daily Times

ISLAMABAD: Pakistan plans to sell stakes in at least three companies by the end of June, reviving an asset sale programme stymied by political instability and a slowing economy. "This will be the start of our programme with a new concept of modernising companies with efficient management rather than a fund-raising target," Privatisation Minister Naveed Qamar said in an interview.

Ministry officials will meet potential buyers for National Power Construction Co. (NPCC) on March 28 to set a bidding date as early as next month, he said. Stakes in Jamshoro Power Co. (JPC) and Heavy Electrical Complex (HEC) may be sold by June 30, Qamar said.

Funds raised from asset sales fell by a quarter last year as political wrangling and terrorist attacks in the nation's biggest cities deterred overseas investors. Pakistan yesterday said it would seek $10 billion in funds over the next three years for development projects after securing a $7.6 billion bailout from the International Monetary Fund to avert default.

Since the start of this fiscal year on July 1, Qamar has completed only one transaction, raising Rs 1.34 billion ($16 million) by selling a stake in Hazara Phosphate Fertilizers Ltd., a urea maker. That compares with the previous government of former President Pervez Musharraf raising Rs 25.5 billion in a year through stakes in Habib Bank Ltd. and United Bank Ltd.

For more on this article, please click on the following link: Govt plans to sell stakes in 3 companies this year: Qamar: Daily Times

Scope for Pakistan rate cuts if inflation falls-IMF: Reuters

WASHINGTON, Feb 25 (Reuters) - Pakistan's monetary policy is appropriate but there would be room to lower interest rates if inflation declined, the International Monetary Fund said on Wednesday.

In a statement following a 12-day staff mission to review a $7.6 billion stand-by lending program, the IMF said it was "impressed" by Pakistan's resolve to sustain prudent policies, strengthen the social safety net and pursue reform.

For more on this article, please click on the following link: Scope for Pakistan rate cuts if inflation falls-IMF: Reuters

Government urged not to seek more loan from IMF: Online News

ISLAMABAD: Acting President, Islamabad Chamber of Commerce and Industry (ICCI), Shaban Khalid has urged the government not to seek more loan from IMF as it would have devastating effects on the economy in the long run.

Acting President ICCI was commenting on the statement of Advisor for Finance Mr. Shaukat Tareen that a Pakistani delegation was holding talks with IMF officials in Dubai for seeking 4.5 billion dollars new loan.

Pakistan’s external debt and liabilities have surged to $50.85 billion during the second quarter of current fiscal year from $45.50 billion and the main contributor to this rise in foreign debt was $3.1 billion obtained from International Monetary Fund in November 2008, Acting President ICCI observed.

He underlined that in coming days, the annual debt payments would further increase as a result of surge in external debt and liabilities which will put more burdens on our scant financial resources.

Shaban Khalid said our foreign debt and liabilities have risen by $15.01billion during last three and a half years from $35.834 billion at the end of June 2005 while additional IMF loan will further enhance our debt servicing obligations squeezing our resources for developmental projects.

He said we should learn from the history as the history of IMF relationship with countries shows that IMF loaning facilities always proved harmful to people as well as to business entities.

He said IMF prescriptions to borrowing countries like eliminating all subsidies on utilities and agriculture inputs, slashing government spending and raising taxes made conditions tougher for general public and businessmen.

For more on this article, please click on the following link: Government urged not to seek more loan from IMF: Online News

Pakistan repays maturing $500 mln Eurobond: Reuters

KARACHI, Feb 19 (Reuters) - Pakistan fully repaid a maturing $500 million euro bond, plus $17 million interest, on Wednesday, the central bank said on Thursday.

"We fully paid the amount yesterday," central bank spokesman Syed Wasimuddin told Reuters, referring to the bond which was issued in 2004 and matured on Thursday.

For more on this article, please click on the following link: Pakistan repays maturing $500 mln Eurobond: Reuters

‘Coalition support arrears for war on terror have reached $1.5bn’: Daily Times

By Sajid Chaudhry

ISLAMABAD: Arrears of coalition support for the war on terror have increased to $1.5 billion since May 2008, Finance Adviser Shaukat Tareen said on Thursday.

“We have asked them to at least release $100 million per month and scrutinise the remaining claim of $50 million for subsequent disbursement and they have termed it as a good suggestion,” he told reporters after inaugurating a one-day workshop on the Medium Term Budget Framework (MTBF).

He said that Pakistan would forward its formal request for additional $4.5 billion to bridge the financing gap owing to losses of the war on terror to the International Monetary Fund (IMF) authorities at the IMF-World Bank annual meeting in April.

Responding to a question on the IMF review of Pakistan’s economy underway in Dubai, he said that review is going well and there would be positive a outcome.

For more on this article, please click on the following link: ‘Coalition support arrears for war on terror have reached $1.5bn’: Daily Times

Pakistan expected to get $750m IMF loan in March: Daily Times

By Sajid Chaudhry

ISLAMABAD: Pakistan is likely to receive a $750 million loan from the International Monetary Fund (IMF) by the end of March, after the successful completion of the first review of the two parties’ standby agreement.

Sources in the Finance Ministry told Daily Times the first review of the standby agreement with the IMF would be conducted in Dubai between February 14 and 24.

They said the key performance benchmark was a budget deficit at or below 4.2 percent of the Gross Domestic Product (GDP) during the current fiscal year.

The other important benchmark, they added, was to maintain State Bank borrowing at Rs 258 billion at the end of each quarter.

They said Pakistan’s budget deficit had been estimated at around two percent of the GDP, much less than the target agreed upon with the IMF. Similarly, they added, the State Bank borrowing had been maintained at the agreed upon level so both conditions had been met successfully.

For more on this article, please click on the following link: Pakistan expected to get $750m IMF loan in March: Daily Times

Capitalism Freezes in Worldwide Winter of Discontent: Bloomberg

By James G. Neuger

Jan. 12 (Bloomberg) -- As capitalism staggers through its first globalized economic crisis, the costs won’t be measured only in dollars and cents.

From newly rich Russia to eternally impoverished sub- Saharan Africa, social strains are threatening the established political order, putting some countries’ very survival at risk.
In the past month, Nigerian rebels threatened renewed warfare against foreign oil producers, Russia sent riot police from Moscow to quell an anti-tax protest in Siberia and China’s communist leadership warned of social agitation as the 20th anniversary of the Tiananmen Square massacre looms.

The disillusionment and spillover effects of the global recession “are not only likely to spark existing conflicts in the world and fuel terrorism, but also jeopardize global security in general,” says Louis Michel, 61, the European Union’s development aid commissioner in Brussels.
Somewhere in the wreckage may lurk an unexpected test for U.S. President-elect Barack Obama, 47, one that upstages his international agenda just as Afghanistan’s backwardness and radicalism led to the Sept. 11 attacks that defined the era of George W. Bush only eight months into his term.

Among the possible outcomes: instability in Pakistan, a more aggressive if economically stricken Iran, a collapsing Somalia, civil disorder in copper-dependent Zambia, a strengthened, drug-financed insurgency in Colombia and a more warlike North Korea.

Cascading Into a Crisis

The U.S. housing slump that began in 2007 has cascaded into a worldwide crisis that forced central bankers to cut interest rates to near zero to unlock credit markets, pushed governments to bail out their biggest banks amid a $1 trillion of writedowns, and sent titans like General Motors Corp. and American International Group Inc. begging for bailouts.

The World Bank reckons trade will shrink for the first time in more than 25 years, deepening the economic hole for governments in developing nations, where higher food and fuel prices cost consumers an extra $680 billion last year and pushed as many as 155 million people into poverty.

Nuclear-armed Pakistan, once touted by Bush as the key U.S. ally in the war on terror, sits at the nexus between economic insecurity and extremism.

“Blood and tears” may be Pakistan’s fate, says Thaksin Shinawatra, 59, who as prime minister of Thailand fought rural poverty during a stormy five-year tenure until his ouster by a military coup in 2006. “That’s where I’m worried, and also about political stability, and the terrorist activities are there,” he said in an interview.

IMF Bailout

On Nov. 25, Pakistan clinched a $7.6 billion International Monetary Fund bailout to avert a debt default amid ebbing growth and an inflation rate of 25 percent in November that is ruining the livelihoods of its poor.

For more on this article, please click on the following link: Capitalism Freezes in Worldwide Winter of Discontent: Bloomberg

Pakistan’s Inflation Slows After Four Rate Increases: Bloomberg

By Khalid Qayum

Jan. 12 (Bloomberg) -- Pakistan’s inflation eased from near a three-decade high in December after the central bank raised its benchmark interest rate four times in 2008.
Consumer prices in South Asia’s second-largest economy increased 23.34 percent from a year earlier after gaining 24.68 percent in November, the Federal Bureau of Statistics said in Islamabad today. Analysts were expecting a 22.6 percent increase.

Slower inflation may allow the State Bank of Pakistan to refrain from another rate increase in its next policy statement later this month, economists said. The central bank promised the International Monetary Fund as part of a $7.6 billion bailout to raise borrowing costs if foreign reserves drop too low.

“Given our declining inflationary numbers and stable exchange rate outlook, we expect interest rates to decline in coming months,” said Muhammad Imran Khan, an analyst at First Capital Securities Ltd. in Karachi. “An interim cut in the key policy rate between January and July cannot be ruled out.”

Former Governor Shamshad Akhtar on Nov. 12 raised the central bank’s key rate by 2 percentage points to 15 percent, describing the move as “the toughest decision of my life.” The bank pledged to the IMF to increase the rate again if foreign reserves fell below $1.165 billion at the end of December.

For more on this article, please click on the following link: Pakistan’s Inflation Slows After Four Rate Increases: Bloomberg

Rupee firms: Dawn

Tuesday, November 25, 2008

KARACHI: The Pakistani rupee ended firmer on Monday on expectation the International Monetary Fund (IMF) will approve a $7.6 billion stand-by arrangement for the country, dealers said. IMF officials are due to meet in Washington on Monday to discuss a stand-by arrangement for Pakistan, according to the Fund’s Web site.

The rupee was quoted closing at 78.90/79.00 to the dollar compared with Saturday’s close of 79.06/16. “The rupee has been strengthening slowly for the past few days following the decision to enter an IMF programme,” said a currency dealer. The loan should help the rupee stabilise, at least in the short term, after a sharp depreciation this year as a balance of payments crisis developed, dealers said.

For more on this article, please click on the following link: Rupee firms: Dawn

Pakistan to get $7.6 billion under IMF programme: Tarin: Business Recorder

RIZWAN BHATTI

KARACHI (November 16 2008): Pakistan, after seven years' gap, has finally re-entered the International Monetary Fund (IMF) programme to receive $7.6 billion for replenishing its fast depleting reserves, after its friends, multilaterals and other donor agencies and international financial institutions showed reluctance to help it financially.The announcement to this effect was made by Shaukat Tarin, Advisor to Prime Minister on Finance, at a press conference, along with Dr Shamshad Akhtar, Governor, State Bank of Pakistan.Tarin said: "IMF has accepted Pakistan's formal request for funding, and an agreement with IFM has been reached on a rescue package to overcome the country's economic crisis." He said that Pakistan would receive $4.5 billion this year as part of the 23-month IMF deal, while the remaining amount would be received next year.

He said: "The interest rate on the IMF programme will be 3.1 to 3.5 percent, with some changes as per market conditions, which would be repaid during the fiscal years 2012 to 2016."However, he made it clear that this fund would not be used for any non-development expenditures and stock markets, saying that the loan would be utilised for maintaining the declining foreign reserves, besides overcoming its balance of payments crisis. He said that the IMF financing facility would give confidence not only to the markets and the investors but also to other IFIs and friends.

For more on this article, please click on the following link: Pakistan to get $7.6 billion under IMF programme: Tarin: Business Recorder