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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