Pak-US strategic talks push Karachi stocks 183 points up: Daily Times

KARACHI: The Karachi stock market witnessed a bullish trading session on Wednesday as investors went for across-the-board buying.

Analysts said the US-Pakistan strategic talks in Washington, which are expected to resolve the energy crisis in Pakistan and make agreements for export of Pakistani products to the US, did the trick.

The Karachi Stock Exchange (KSE) 100-share index gained 182.92 points or 1.84 percent to close at 10,146.27 points as compared to the previous session’s 9,936.35 points. The KSE 30-share index closed at 10,475.66 points with a gain of 207.20 points. The KMI 30 closed at 15,260.99 points with a rise of 247.68 points.

Analysts said the market opened in the green zone and remained in the buoyant momentum throughout the trading session amid intense foreign interest in oil and gas, bank and fertilizer sectors on strong valuations. Healthy volumes were traded during the session reflecting growing confidence among investors.

The market turnover went up by 117.91 percent and traded 160.30 million shares as compared with the previous session’s 73.56 million shares. The overall market capitalisation was up by 1.44 percent and traded Rs 2.876 trillion as against Rs 2.835 trillion. Out of total 411 companies, 239 closed in the positive zone, 152 in negative and 20 remained unchanged.

For more on this article, please click on the following link: Pak-US strategic talks push Karachi stocks 183 points up: Daily Times

Pakistan rupee gains sharply to close at 4-mth high: Reuters

KARACHI, March 25 (Reuters) - The Pakistani rupee gained sharply on Thursday to close at a near four-month high, thanks to increased dollar inflows and easing demand from importers, dealers said.

The rupee PKR closed at 83.67/72 to the dollar compared with 84.10/13 on Wednesday.

"There have been some good dollar inflows in recent days which have supported the rupee," said a dealer at a foreign bank.

Another dealer said the strengthening rupee had also forced exporters to sell dollars more aggressively in the interbank market, further improving supplies of the U.S. currency.

"Dollar supplies are currently more than the demand and the market is anticipating more inflows as well, and this has resulted in more dollar selling by exporters who fear losses in case the rupee gains further," said the dealers.

For more on this article, please click on the following link: Pakistan rupee gains sharply to close at 4-mth high: Reuters

Pakistan says economic problems easing: Forbes

Economic woes complicating Pakistan's struggle against Islamic militants are easing thanks to a tough rescue plan backed by the International Monetary Fund, but the program needs more than a year to succeed, the country's finance chief said Friday.

The perilous state of Pakistan's economy - which faced trouble even before the global economic crisis - is raising concern that unemployment and inflation will destabilize the nuclear-armed nation's pro-Western government and fan Islamist violence.

Shaukat Tarin told reporters the country's budget and trade deficits have already narrowed considerably.

The government's budget deficit will decline from 7.4 percent of gross domestic product in the past fiscal year, when ended in June, to between 4 percent and 4.2 percent in the current year, Tarin said.

For more on this article, please click on the following link: Pakistan says economic problems easing: Forbes

Rupee may slip after SBP stops dollar supply for furnace oil : The News

By Mehtab Haider

ISLAMABAD: Governor State Bank of Pakistan Salim Reza has hinted at the possibility of further depreciation of the rupee against the dollar from next month when the central bank will stop providing dollars for import of furnace oil under the International Monetary Fund’s programme.

“The SBP’s decision to stop dollar supply for import of furnace oil from next month may put some pressure on the exchange rate and in the short term it can reduce rupee value by 2 to 3 against the dollar,” the SBP Governor said in his first appearance before the Senate Standing Committee on Finance and Revenue which met under the chairmanship of Senator Ahmed Ali at the Parliament House here on Wednesday.

At this point, PML (Q) Senator Haroon Akhtar reminded the central bank governor that he should not make any statement on further depreciation of the rupee which will start pushing the rupee lower against the dollar from tomorrow. At this point the Governor SBP said that when short-term phenomenon would be over the rupee would stabilise at the existing level of 79-80.

The senators from the treasury and opposition benches questioned the top economic managers on rising interest rates at the cost of economic activities, sustainability of debt in years ahead, PPP-led government’s endorsement of policies pursued by the Musharraf regime in official communication to the IMF and unutilised funds in the accounts of ministries and public sector organisations.

Earlier, in the standing committee meeting, the Governor SBP said that the central bank was not targeting the exchange rate mechanism and it intervened in the market only to smoothen it.

Under the IMF programme, the SBP will stop providing dollars for importing furnace oil by mid-February. For other POL products, the SBP will stop providing dollars for one product in June 2009 and it will be completely phased out by the next financial year.

Senator Haroon Akhtar questioned the SBP Governor regarding the tight monetary policy saying that the inflation was not caused by demand push but actually cost push was fuelling the core inflation. Governor SBP endorsed all points raised by Senator Haroon Akhtar and kept on saying that the tightening of monetary policy by raising discount rates aimed to curtail core inflation.

The Governor SBP in his presentation told the meeting that the private sector credit had gone down to Rs178 billion in first six months of the current fiscal against Rs246 billion in the same period of the previous financial year, registering a decline of Rs68 billion.

For more on this article, please click on the following link: Rupee may slip after SBP stops dollar supply for furnace oil : The News

Remittances up, capital outflow halts: Dawn

By Shahid Iqbal

KARACHI: Overseas Pakistani workers sent record remittances in December helping the country to minimise its trade and current account deficits.

The State Bank on Tuesday reported an inflow of $673.5 million in December 2008, setting a new record of highest inflow in a month. Last record was of $660.35 million in September 2008.

The inflow of December was 40.5 per cent higher than the inflow during the same month of last year. In December 2007, the country received $479.26 million.

The half year (July-Dec 2008) inflows of remittances were 19 per cent higher than the corresponding period of last year, encouraging the market to improve their trust on strength of the rupee.

‘The inflow of remittances is one of the key reasons for strengthening of rupee-dollar parity which now looks settled around Rs79.80 per dollar after a massive depreciation of rupee by 23 per cent during 2008,’ said Atif Ahmed, a currency dealer. During the last six months, the country received $3.640 billion against $3.066 billion of the six months of the preceding year. The monthly average during this period reached $606.67 million which was 18.7 per cent higher than the average of six months of previous year.

For more on this article, please click on the following link: Remittances up, capital outflow halts: Dawn

Pakistan to remove its market floor: Financial Times

By Farhan Bokhari in Islamabad

Pakistan’s stock market regulator on Thursday night ordered the managements of the country’s three stock exchanges to remove an artificial floor introduced in August this year to prevent share prices from tumbling further after many months of declines.

However, the floor became controversial amid charges from angry investors who argued this artificial mechanism effectively brought activity to a virtual halt as daily volumes of shares traded fell to an all-time low.

The order requires the Karachi, Lahore and Islamabad stock markets to end the limit from Monday, in spite of many brokers and investors opposing such a move on the grounds it would see a flight of capital.

For more on this article, please click on the following link: Pakistan to remove its market floor: Financial Times

IMF tranche boosts Pakistan's reserves to $9.4 bln: Forbes

KARACHI, Dec 1 (Reuters) - Pakistan's foreign currency reserves stood at $9.4 billion by Nov. 26 after receiving the first tranche of $3.1 billion from the International Monetary Fund last week, the State Bank of Governor said on Monday.
Reserves had totalled $6.6 billion as of Nov. 22.



The IMF last week approved a $7.6 billion loan to avert a balance of payments crisis and prevent the government defaulting on its international debt obligations.



For more on this article, please click on the following link: IMF tranche boosts Pakistan's reserves to $9.4 bln: Forbes

Germany in 40bn euro debt swap with Pakistan: Gulf Times

By Anwar Elshamy

SETTING an example of innovative financing for development, Germany, Pakistan and the Global Fund to Fight Aids, Tuberculosis and Malaria have signed a new type of debt swap on the sidelines of the Second International conference on Financing for Development being held in Doha.

Under this Debt2Health agreement, Germany cancelled 40mn euros of Pakistani debt on the condition that Pakistan invests 20mn euros in domestic health programmes supported by the Global Fund.

The agreement was concluded by the Heidermarie Wieczorek Zeul, the special envoy of the UN General secretary for the conference and Federal Minister of economic cooperation and development, Germany and Hina Rabbani Khar minister of state for finance and economic affairs, Pakistan and Dr Michel Kazatchkine, executive director of the Global fund. Speaking at a press conference, the Minister of Economic Co-operation and Development of Germany Wieczorek-Zeul said that Pakistan is only the second country to benefit from the Debt2Health creative financing instrument.

For more on this article, please click on the following link: Germany in 40bn euro debt swap with Pakistan: Gulf Times

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's Rupee Strengthens for a Fifth Week Against Dollar: Bloomberg

By Farhan Sharif

Nov. 21 (Bloomberg) -- Pakistan's rupee posted a fifth weekly gain, its best winning streak in a year, after the government said it expects to receive the first installment of an International Monetary Fund bailout this weekend. Bonds fell.

The currency closed at a six-week high after the government said it expects a minimum $3.2 billion of a $7.6 billion IMF loan to be transferred to the central bank as soon as the fund's executive board approves the payment. The rupee tumbled as much as 26 percent this year, reaching a record low last month as concern mounted the government would default on its overseas debt obligations.

For more on this article, please click on the following link: Pakistan's Rupee Strengthens for a Fifth Week Against Dollar: Bloomberg

Opportunities for Pakistan in the Global Financial Slump: Economistan

FREE MARKETS:Many opportunities abound for countries like Pakistan due to the dynamics of the essential commodity prices coupled with low shipping rates. Time to harness these to our advantage.

LIGHT AT THE END OF THE TUNNEL
By Saad Sarwar Muhammad

Monday, November 17, 2008

The whole world is undergoing a major financial crisis which has caused the downturn of almost all the developed world economies with job losses, bailouts and financial losses becoming the order of the day. In such unprecedented times of financial trouble the developed world is looking towards developing countries with huge reserves and financial muscle. Countries like China, Saudi Arabia and Turkey fit the bill. They were invited in the recently held summit of the G-20 to help the developed economies recover from the slump and in some way bail out the developed countries from the fiasco they are in.

The world has been undergoing a rollercoaster ride when it comes to the prices of different commodities, the stock market index levels and the value of dollar and yen versus other major currencies. Oil and Gold are two commodities that have hit a nosedive in recent times. Iran has reportedly given the intent to convert its reserves into Gold in order to overcome the deficit that can result in the reduction of price of oil. The value of dollar and yen is soaring at a time against major European currencies giving the indication of more trust in the resilience of the US economy as compared to the EU.

Pakistan has been suffering its own financial crisis lately, which somehow seems unrelated to the recent global recession. Pakistan’s problems have mostly been homegrown based on the energy crisis due to shortage of alternative energy power sources such as hydel, wind, solar and to some extent nuclear. Pakistan’s financial crisis has resulted from the withdrawal of funds from Pakistan’s stock market, the Karachi Stock Exchange (KSE) since the coming of the new civilian government. Pakistan’s stock market, KSE, has lost close to $36 billion dollars this year in market capitalization. Resultantly, the Pakistani rupee has also borne the brunt with the value of rupee falling from around 60 to a dollar from the beginning of the year to around 80 to a dollar at the moment (many currency dealers have also been arrested in the wake of the rupee devaluation, famous among them the firm of Khanani and Kalia). Not to mention the floor imposed on the KSE to allow the stock market to breathe a sigh of relief. The sigh has converted to deep sleep as the floor remains imposed after many many weeks.

For more on this article, please click on the following link: Opportunities for Pakistan in the Global Financial Slump: Economistan

Pakistan can raise $5bn in 30 days: Dawn

By Yousuf Nazar

Given the current ‘political realities’, Pakistan seems to have little option but to go to the IMF. But the truth is Pakistan can raise $5 billion in the next 30 days if it wants to; even if Saudi Arabia does not extend oil credit facility.The United States wants Pakistan to work with the IMF and the government does not want to upset Washington. Otherwise why would it sit on proposals (like the exchangeable bonds and the securitisation of remittances) for months that could have raised a few billion dollars? The proposal from the Chinese to buy minority stake in the National Bank of Pakistan, likewise, was put in cold storage.Raising $5 billion will take Pakistan’s foreign exchange reserves to about $12 billion. This would represent a comfortable level of four months worth of next 12 months of imports as Pakistan’s annual import bill is likely to drop sharply to $33 billion from $40 billion in FY 2007-08 due to the collapse of the price of oil and these of other commodities such as edible oil. Four months of import cover is considered a reasonable level and the country can use this time to take steps, such as privatisation or joint ventures in strategic areas, to mobilise funds for its medium- term needs.Just consider the following four of the many ways the government can use to raise $5 billion for meeting the current crunch. These are not necessarily the most desirable options but are far better than carrying a begging bowl around the world.— Pakistan has about $1.8 billion in gold reserves. Borrowing or leasing against gold is a standard international practice. Pakistan can borrow for six months at the rate of around 2.1 per cent from the central bank of a friendly country such as the United Arab Emirates. India did this in 1991 for a short period.— Pakistan can borrow (not beg) at least US$1.5 billion from China on commercial terms by putting its shares in large government-owned corporations as collateral. China has, in the past year, extended loans to other countries (e.g. Congo) on the basis of proper collateral. The cost of loans secured against collateral can be significantly cheaper compared with other options.— Pakistan can get another $800 million in a few days if the US reimburses the remaining amount for 2008 it should pay under the Coalition Support Fund relating to expenditure incurred on combating terrorism. Pakistan has received only one instalment ($364.7 million in September 2008) for this year’s expenses. A senior military source told Internews that the amount for reimbursement was calculated on the basis of six-monthly reports. He said all bills related to the expenditure had been audited jointly by a team of Pakistani military officers and the US embassy.

For more on this article, please click on the following link: Pakistan can raise $5bn in 30 days: Dawn

Pakistan's Economy:Treacherous ground: Economist

Oct 30th 2008 | DELHI

From The Economist print edition

An earthquake adds to Pakistan’s woes

ON TOP of a bloody insurgency and a listing economy, Pakistan must now contend with a natural calamity. Before dawn on October 29th, an earthquake of magnitude 6.4 or greater struck the mountainous province of Baluchistan not far from its capital, Quetta. The death toll quickly exceeded 200.

It was the biggest earthquake since one in October 2005 that killed over 70,000 in Pakistan-controlled Kashmir. After that catastrophe, America spent almost $1 billion on relief operations, ferrying supplies to mountain villages by Chinook helicopter. According to one American official, cited by an independent working group on Pakistan policy, the goodwill America earned represents “the most successful strategic confrontation to date in the battle with the terrorists in South Asia.”

Even before the latest earthquake, Pakistan was again hoping its strategic position would persuade the world to rush to its aid. The ground is giving way beneath its economy. A distracted, overstretched government has allowed inflation to soar (see chart), the rupee to plummet and foreign-exchange reserves to seep away. On October 17th the central bank’s stash of hard currency was just over $4 billion, enough to cover just four to five weeks of imports.

Pakistan hoped for an infusion of cash from the “Friends of Pakistan”, an informal circle including China, America and Saudi Arabia. But to its dismay, only the IMF appears ready to offer the sums it needs as quickly as it needs them. The IMF is expected soon to approve a loan of up to $12 billion, probably spread over two years.

Pakistan and the IMF may not be “friends”; but nor are they strangers. Some of the politicians and civil servants now in power were “pretty traumatised” by the IMF programmes they endured during the 1990s, says Mohsin Khan of the fund. In those days, the IMF twisted their arms to make tough fiscal commitments they could not keep. In 2005 the military regime, having proudly turned down the last two instalments of its loan, declared that it had “broken the begging bowl forever”.

For more on this article, please click on the following link: Pakistan's Economy:Treacherous ground: Economist

WSJ slams IMF's prescriptions: Business Recorder

NEW YORK (October 30 2008): An influential US newspaper has criticised the prescriptions of the International Monetary Fund (IMF)--cuts in government expenditures, devaluation, and tax increases--for bailing Pakistan out of the financial crisis, saying that the measures would have opposite effect.

"Pakistan needs market-oriented reform along the Chilean and Irish models, not the IMF's austerity prescriptions," The Wall Street Journal said in an editorial, titled 'Does the IMF have no fresh ideas?' "Pakistan's economic wellbeing matters not only for its 165 million citizens but also because it's a key country in the world-wide war on terror," the editorial said.

The Journal said the IMF declined comment on a Pakistan Finance Ministry spokesman's statement last week that the Fund "wants Pakistan to reduce its government expenditures, maintain a 'flexible' exchange rate and 'increase' its tax-to-GDP ratio".

For more on this article, please click on the following link: WSJ slams IMF's prescriptions: Business Recorder

China assures to stand by all weather ally Pakistan: PTI

Islamabad, Oct 26 (PTI) Pakistan has been assured by it's all weather ally China that it will stand by it under all circumstances and strengthen their strategic partnership.The assurance to this effect was re-conveyed by the Chinese leaders to Prime Minister Syed Yousuf Raza Gilani during his visit to Beijing that concluded yesterday, Pakistan Ambassador to China Masood Khan said.China said it will help safeguard Pakistan's sovereignty and territorial integrity, while maintaining existing strong bonds of friendship.It was both symbolic and substantial in nature that helped to reinforce strong commitment of the two countries to push forward their decades' old relationship, as strong time-tested traditional allies in the region, the envoy said commenting on Premier Gilani's just concluded visit to Beijing for Asia Europe meet.Gilani during his interactions with the Chinese Premier Wen jiabao received strong indications that China will continue to help Pakistan to meet new challenges, in the wake of terrorism and financial crisis.China said it support's Pakistan's stand on counter-terrorism, normalisation of its relations with India and role as a front-line state to wipe out menace of terrorism, the Ambassador said, according to the official APP news agency.

For more on this article, please click on the following link: China assures to stand by all weather ally Pakistan: PTI

Pakistan Prefers Friends’ Aid to IMF Package: Khaleej Times

ntensive Pakistan-IMF consultations have been taking place in Dubai since Tuesday, for a bailout plan to avert possible debt default.

Pakistan has been trying to get International Monetary Fund endorsement for its current strategies for economic recovery that is imperative to persuade other multilateral lenders and friendly countries to come to its rescue.

Islamabad immediately needs 4 to 5 billion dollars to stabilise the economy and enhance confidence in its financial system — a pre-requisite to arrest ever-widening gap in balance of payments position amid rapidly depleting reserves and steep slide in rupee value. High inflation (25 per cent), unsustainable budget deficit, liquidity squeeze in the banking system due to government borrowing has multiplied economic woes.

It is apparent that both sides have agreed in principle on the need for help that was decided in their meetings in Washington in September. But Pakistan insists the IMF is only the last option and the current talks are a health-check and assessment of its financial restructuring plan, which does not include IMF funding at this stage. The plan is already underway to control expenditures side by doing away with subsidies on POL and electricity.

“It is not an extraordinary meeting but, yes, the circumstances have made it so”, says the Adviser Finance Shaukat Tareen. The IMF also confirms a formal request has yet to come but has been encouraging Islamabad to accept funding that may go up to $7 to 10 billion during next two years. The last time Pakistan came off an IMF programme was in December 2004, vowing it would never borrow from the agency again.

For more on this article, please click on the following link: Pakistan Prefers Friends’ Aid
to IMF Package: Khaleej Times

Pakistan to Start Put Options for Overseas Investors: Bloomberg

By Farhan Sharif and Pooja Thakur

Oct. 23 (Bloomberg) -- Pakistan's stock regulator will allow foreign investors to buy put options in seven state-run companies, before lifting trading curbs that have prevented equity sales for almost two months.

The government will guarantee up to 30 billion rupees ($369 million) to enable state-run funds to write put options on Oil & Gas Development Co. and six other stocks, the Securities & Exchange Commission said yesterday. The regulator also approved a 20 billion-rupee fund to buy equities.

The measure may encourage investors to hold onto their shares when trading restrictions are lifted on Oct. 27, capping further declines in the KSE100 Index that has lost more than a third of its value this year. Since the limits were imposed, the government has approached the International Monetary Fund for a bailout to avoid defaulting on its debt, deterring investors.

``If in one year's time, the situation improves globally and in the local market, they will benefit instead of selling their holdings at this point,'' said Tariq Iqbal Khan, chairman of National Investment Trust, Pakistan's biggest asset manager. ``If these foreign investors accept the option, and do not sell in the ready market, the overall selling pressure will be lightened.''

Overseas investors who held shares in the market on Aug. 27, when the government capped a decline in its benchmark KSE100 Index, will be able to buy these options, the regulator said.

A put option is an agreement that gives the buyer the right to sell a specific quantity of a particular security by a certain date. The option is not obligatory and is traded during its life. The holder hopes the stock will drop in price.

For more on this article, please click on the following link: Pakistan to Start Put Options for Overseas Investors: Bloomberg

IMF offers $6bn package: Dawn

By Anwar Iqbal
WASHINGTON, Oct 21: The United States has repeated its offer to help rescue Pakistan from the current financial crisis as diplomatic sources in Washington say the International Monetary Fund has agreed to provide $6 billion to the country to boost up its ailing economy.

�It�s hard for me to speculate,� said State Department�s deputy spokesman Robert Wood when asked if the IMF had agreed to offer a rescue package to Pakistan. But �we obviously will try to see what we can do to help Pakistan get through its financial crisis�.

Pakistan had �no choice but to seek help from the IMF,� said another State Department official. The official, who was not identified, was quoted in the US media as saying that Pakistani officials knew it would not be a popular decision in Pakistan but they had to go to the IMF.

�It won�t be popular with the public and it sends a lot of negative signals about Pakistan�s financial situation, its creditworthiness. But it�s a decision the Pakistanis are going to have to make,� he said.

The country�s inflation is running at around 25 per cent, and its foreign currency reserves are rapidly depleting, forcing the government to seek emergency cash advance from friendly countries and international financial institutions.

For more on this article, please click on the following link: IMF offers $6bn package: Dawn

MCB Plans Takeovers as Crisis Pushes Pakistan's Banks to Merge: Bloomberg

By Naween A. Mangi

Oct. 21 (Bloomberg) -- MCB Bank Ltd., Pakistan's biggest by market value, plans to acquire domestic rivals as the nation's deepest economic crisis in a decade and tighter central bank rules push more lenders to consolidate.

``We have excess capital and we want to deploy it in assets that make sense for us,'' Chief Executive Officer Atif Bajwa said in an interview in Karachi yesterday. He didn't say which banks he was evaluating. ``The advantage of looking to get something now is that asset prices are low.''

Central Bank Governor Shamshad Akhtar last month increased banks' capital requirements almost fourfold within five years to spur mergers and reduce risk. Bajwa will need to grapple with Asia's highest borrowing costs and a faltering economy that forced Pakistan to seek a $10 billion bailout to avoid default.

``There's going to be a domestic scenario of acquisitions and mergers in which MCB will be a prominent player,'' said Saad Bin Ahmed, head of research at Karachi-based Capital One Equities Ltd., who rates MCB's stock ``hold.'' ``MCB is part of a group which is financially very strong.''

For more on this article, please click on the following link: MCB Plans Takeovers as Crisis Pushes Pakistan's Banks to Merge: Bloomberg

Pakistan’s banking system remains unhurt by financial market turmoil: SBP Governor: APP

KARACHI, Oct 21 (APP): Banking system of Pakistan has escaped the major ravaging effects of the recent financial market turmoil emerging from the US and engulfing the developed European economies. This was stated by Governor, State Bank of Pakistan (SBP), Dr. Shamshad Akhtar while speaking at the Asian Banker Dialogue on “The Banks We Like : and the Impact of the Global Financial Crisis on Pakistan’s Banks” here at a hotel on Tuesday.

The SBP Chief, however observed “In my assessment, Pakistan’s economy to- date has been affected mainly by the indirect impact of global events which led to the rise in the global commodity prices.”

Pakistan is perhaps the worst hit economy by the surge in global commodity prices as it has been a predominant factor in derailing the macro-economic fundamentals, she remarked.

Citing an example to explain this situation, she said almost 80 percent of the external current account deficit in FY08 is equivalent to the oil import bill which shot up to more than dollars 11 billion in FY08 as compared to below dollars 3 billion a few years back. Similarly, a large increase in FY08 fiscal deficit is on account of delay in pass-through of the international price hike at retail level, she observed.

Dr Akhtar said the financial markets in Pakistan have not been hit by the subprime markets or the associated contagion directly as Pakistan’s banking system from July 2007 to September 2008 did not face any liquidity problems. With strong regulatory oversight, we have seen significant enhancement of capital and capital adequacy ratio supported by high provisioning requirements.

For more on this article, please click on the following link: Pakistan’s banking system remains unhurt by financial market turmoil: SBP Governor: APP