Surprisingly strong US housing and consumer confidence data fuelled a stock market recovery which lifted sterling as much as a cent from the day's low versus the dollar, but wasn't enough to fully eclipse the bearish sentiment clouding it.
The yield on the two-year UK gilt fell to its lowest ever level, reflecting the view that UK interest rates will stay low for a protracted period to revive the struggling economy. British mortgage data on Tuesday were mixed - mortgage approvals in July jumped to their highest in 17 months but growth in net lending was the weakest in nine years.
"We've had a cumulative build in risk appetite during the day ... but one thing that's been striking has been the powerful upswing in cable is starting to peter out, and euro/sterling is starting to trend higher," said Robert Minikin, senior currency strategist at Standard Chartered in London.
At 1505 GMT, the euro was up 0.4 percent on the day at 87.45 pence. The euro rose to its highest level since June 8 at 87.575 pence, pushing further away from technical support at the 100-day moving average of 86.96 pence. Euro/sterling, on its longest winning streak since March of five consecutive daily gains, on Monday posted its first close above the 100-day moving average since April 4, Reuters charts showed.
Sterling hits 2-1/2 month low
Posted by imdurrani Labels: forex market, World Currencies, world forexEight MoUs signed during Zardari's visit to China
Posted by imdurrani Labels: Asia, China, Pak Economy, pakistan
President Zardari during his four-day visit to Zhejiang and Guangdong provinces - China's two most prosperous models of economic development, not only witnessed the signing of MoUs particularly on power generation and agriculture, but also held a series of meetings with China's business giants.
The President invited a Chinese firm to visit Pakistan for coal gasification in Sindh and met Chinese Foreign Minister to discuss a host of bilateral, regional and international issues. Talking to journalists spokesperson to the President Farhatullah Babar said the centre piece of the President's visit was the memorandum of understanding signed particularly the one relating to the building of 7,000 MW hydro power in Bunji in the Northern Areas.
The project will be built on BOOT (build, operate, own and transfer) basis with total foreign investment. The MoU was signed by the Water and Power Ministry of the government of Pakistan and China's Three Gorges Project Corporation that has recently built the world's largest hydropower project in China capable of generating over 22,000 MW and a water reservoir spread overt 650 square kilometers.
During the visit, Pakistan also invited private companies in China engaged in building small and medium dams to bid for the construction of twelve small and medium dams the sites for which have already been identified in the four provinces. Five of the dams will be built in Balochistan, four in Sindh, two each in Punjab and Frontier, he said. A MoU on co-operation in drug regulation and production of hepatitis B and C vaccines was also signed during the visit.
The Sindh Agricultural University (SAU) in Tandojam and the South China Agricultural University (SCAU) in Guangzhou province also signed MoU for co-operation in agricultural research, plant protection and animal husbandry. The President also visited the Pearl River Fisheries Research Institute where another memorandum of understanding was signed for setting up of a model fisheries farm in Pakistan and also to train Pakistani fishermen in the latest techniques.
Wednesday August 26, 2009
Further, to resolve the non-NFC issues the province would also ask the Commission for approximately Rs 175 billion, including Rs 19 billion GST on services unconstitutionally collected by the federal government during last ten years. This was stated by Information Minister Shazia Marri while briefing media at New Sindh Secretariat Building about the In-House Committee meeting held at Chief Minister House under the chairmanship of Chief Minister Qaim Ail Shah.
The meeting was attended by Sindh representative for NFC Commission Qaisar Bengali, Sardar Ahmed, Saifullah Dharejo, Taj Hyder, Finance Secretary Fazlullah Pechoho and Marri. Demanding due recognition for Sindh as a revenue-engine, which contributes 70 percent revenue to the exchequer, the province would stress need for a "fair deal" through adopting multiple criteria, including revenue, population, area, backwardness, geography, etc, Marri said.
Area and backwardness would also be mentioned as genuine demands of Balochistan and NWFP. "We have identified that we would talk for multiple criteria and would also support all fair demands of the other provinces," she added. Later, talking toBusiness Recorder the information minister said that the other three provinces would also back Sindh's multiple criteria formula.
"The dialogue is taking place on various platforms... and I am sure that the future meetings would bring more positive results," she hoped. Stressing importance of an early resolution of NFC Award issue, Marri urged the provinces and political parties to adopt a "reasonable approach" while dealing with the important issue of resource-distribution.
They said that SBP has instructed banks and DFIs to make proper arrangements for the recovery of outstanding loans against sugar stocks with the aim to ensure on-time release of sugar in the market. Sources said that after getting three months grace period, a lobby of sugar mills is trying for another extension for the retirement of loans and advances obtained against sugar stocks.
However, SBP has decided, in principle, not to grant another extension to the sugar mills for retirement of the over Rs 25 billion advances due to the current sugar crisis in the country and new sugarcane crushing season (starting from November) in which banks would provide new loans and advances.
Following the Economic Co-ordination Committee (ECC) decision, the SBP has already granted three-month extension to the sugar mills for the 100 percent retirement of outstanding loans and advances. Although the central bank had fixed July for the retirement of sugar advances, but on industry's demand and ECC decision it allowed the sugar mills to retire their loans by end of October.
With three-month extension sugar mills have been instructed to phasewise adjust entire loans and advances against pledge of sugar stock (both raw and refined) by 31st October, 2009 as against July 31, 2009. Sugar mills were also allowed to retire their dues in four phases starting with 25 percent till July, 2009, 25 percent by end August, 25 percent by end September and 25 percent by end October, 2009.
The central bank has also started close monitoring of banks and DFIs for recovery of outstanding loans against sugar stock on fortnightly basis with the aim to ensure timely release of sugar stocks in the market.
Sources said that recovery of loans and advances by banks and DFIs is on track and borrowers are adjusting their monthly target of 25 percent loans against the pledge of sugar. Banks and DFIs have provided overall Rs 52 billion financing to sugar mills for sugarcane crushing during the season 2008-09.
Out of total disbursement, banks have recovered 38 percent of their loans and advances extended to Sugar Mills against pledge of sugar stocks (both raw and refined) since June 2009. As on June 30, 2009, the loans and advances against pledge of 1.65 million tons were Rs 40.18 billion which have been reduced to Rs 25 billion against pledge of 1.029 million metric tons sugar on August 15, 2009, sources said.
Hence, just in one and a half month 0.621 million tons of pledged sugar stocks have been released by the banks after the recovery Rs 15 billion. The country's monthly requirement of sugar stood at about 0.3 million metric tons.
Tuesday, 25 August 2009 07:45 KARACHI - State Bank of Pakistan (SBP) is likely to trim the policy discount rate by another 100 basis points in the upcoming monetary policy review ahead of macroeconomic changes and IMF tax and treasury reforms. SBP intends to revise monetary decisions in a phased manner, therefore, it is expected that in the forthcoming monetary policy statement, which is scheduled to be announced in the last week of September, the central bank will reduce discount rate by 50bps followed by another 50bps decrease in interest rate by end November 2009. In its second review and staff report under the Stand-By Arrangement, IMF has recommended the Federal Government to remain policy interest rate on hold until core inflation shows a further steep decline. From peak 18.9 per cent core inflation has reduced to 14 per cent in July and is likely to contract further on the back of weak domestic economy. Given the non-compliance of tax, treasury and electricity reforms, analysts believe, IMF has provided a last chance to the government. However, we understand the electricity and tax reforms, if implemented should help to restore fiscal space and in turn the macro economy in the medium term. The treasury reforms are likely to stress the system liquidity and may keep the inter-bank borrowing rate in the tight range. These reforms should increase the inflationary expectation and keep central bank vigilant in the medium term. Meanwhile, IMF in a staff report stated that despite shortcomings in policy implementation, IMF believes Pakistan s economy has continued to stabilise. The quantitative performance is inline with targets except for the fiscal deficit target, which was missed by a big margin. The implementation of structural conditionalities remained weak on grounds of political and systematic considerations during the quarter ending in June. Even then, IMF has accepted the authority s request for augmentation of 200 percent quota on grounds of government s commitment of pressing ahead with tax, electricity and treasury reforms. IMF says government has failed to submit a comprehensive plan for eliminating the inter-corporate circular debt, which is also reflected in the breach of agreement with World Bank and ADB on electricity tariff adjustments by June 30th. IMF further said significant unspent accounts outside the Federal Consolidated Funds are reflected with commercial banks, implying that the transition is not yet complete. Following the World Bank s technical assistance in July 2009, the remaining balances with commercial banks will be surveyed. Moreover, identified government balances with commercial banks will be transferred to the TSA by end-June 2010, subject to an assessment of the impact on the banking sector. Visit Finance.Kalpoint.Com for latest financial stories...!
Agri credit disbursement up 19pc in July
Posted by imdurrani Labels: budget, business, Pak Economy, pakistanTuesday, August 25, 2009 KARACHI - Agricultural credit disbursement by commercial and specialised banks rose 19 per cent year-on-year to Rs 17.847b in the first month of the current 2009-10 fiscal year (FY10). In absolute terms, disbursement of credit to the agriculture sector increased by over Rs 2.849 billion in July, 2009, when compared with total disbursement of Rs 14.998 billion in the same month last year. Overall credit disbursement by five major commercial banks including Allied Bank Limited, Habib Bank Limited, MCB Bank Limited, National Bank of Pakistan and United Bank Limited stood at Rs 10.337 billion in July, 2009 compared with Rs 6.690 billion in July, 2008, depicting an increase of Rs 3.647 billion or 54.51 per cent. Zarai Taraqiati Bank Limited, the largest specialized bank, disbursed a total of Rs 3.509 billion in July, 2009, up 12 percent when compared with Rs 3.132b in July 2008, while disbursement by Punjab Provincial Co-operative Bank Limited stood at Rs 548.127m in July, 2009 compared with Rs 699.062m in the same month last year. Besides, 14 domestic private banks also loaned a combined Rs 3.453b in July, 2009, compared with Rs 4.477b disbursed in July, 2008. It may be recalled that the State Bank of Pakistan has set an indicative agricultural credit disbursement target of Rs 260 billion for FY10. Banks disbursed a total of Rs 233.01 billion to the agricultural sector in FY09.
Tuesday, August 25, 2009
Tuesday, August 25, 2009 
KARACHI: The State Bank of Pakistan (SBP) on Monday said that its offices and commercial banks would issue fresh currency notes of Rs5 and Rs10 denominations during the month of Ramazan. SBP s offices and commercial bank branches throughout the country will issue one packet each of Rs5 and Rs10 denomination fresh notes to one person from their counters till the last working day before Eid-ul-Fitr.
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