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Thursday, 16 August, 2012 SBP injects Rs 75.550 billion KARACHI APP State Bank of Pakistan (SBP) in its reverse repo open market operation (2 and 9 days) in treasury bills and Pakistan Investment Bonds has injected Rs 75.550 billion in the banking system. According to SBP here Wednesday, the offered amount was Rs 75.550 billion while the rate of return for two day stood at 10.10 percent per annum and for nine days 10.09. Basically we owe IMF a lot of money No improvement in foreign exchange reserves for three years due to IMF repayments ISLAMABAD ONLINE The country’s foreign exchange reserves will continue to face mounting pressure in next two to three years due to re- payments of installments to the International Monetary Fund (IMF). Pakistan is likely to knock the door of International Monetary Fund for another loan in current financial year 2012-13 in order to retire IMF’s Stand- by Arrangement (SBA) facility. According to an official the burden of subsidies and higher security-related expenditures have badly affected the country’s fiscal system and adjustment path. The government also failed to focus on growth-oriented policy for reducing unemployment in the country besides borrowing that needed to be reduced in order to further bring down the interest rate. An official said the economy of the country has been badly hit by huge government borrowing, power and gas crisis and uncertain political and law and order situation. The official said more foreign inflows were expected in the coming months from other donors especially after improvement in relations with the US. The US also disbursed $280 million for the energy. The amount received $1.18 billion in Coalition Support Fund (CSF) from the US gave some space to the country’s economic trouble shooter to repay installments to the IMF on monthly bases. Asia’s booming cities must go green or risk disaster: ADB ISLAMABAD APP Asia must act now to pave the way for green re- source-friendly cities or face a bleak and environ- mentally degraded future, said a new Asian Development Bank (ADB) report. In a special chapter of its flagship annual sta- tistical publication, ‘Key Indicators for Asia and the Pacific 2012,’ ADB examined the challenges and opportunities associated with the region’s break- neck urban boom. It also details measures needed to turn cities into environmentally sustainable, in- clusive growth centers. Since the 1980s, Asia has been urbanizing at a faster rate than anywhere else, with the region al- ready home to almost half of all the world’s city dwellers, it said. The report added that in just over a decade, it will have 21 of 37 mega-cities worldwide, and over the next 30 years another 1.1 billion people are ex- pected to join Asia’s already swollen urban ranks. This breakneck expansion has been accompa- nied by a sharp rise in pollution, slums, and widen- ing economic and social inequalities, which are causing rapid environmental degradation. Particularly disturbing are urban carbon diox- ide emissions, which if left unchecked under a business-as-usual scenario, could reach 10.2 metric tons per capita by 2050, a level which would have disastrous consequences for both Asia and the rest of the world. Rising urban populations mean that over 400 million people in Asians cities may be at risk of coastal flooding and roughly 350 million at risk of inland flooding by 2025. Unless managed properly, these trends could lead to widespread environmental degradation and declining standards of living. ISLAMABAD ONLINE P akistan and Tajikistan have signed sugar trade agreement under which 30,000 metric tons white refined sugar will be exported to Tajikistan and for the pur- pose delivery will be in three tranches of 10,000 MT each. While concluding the Pakistan-Tajikistan exten- sive meetings held on Monday and Tuesday between Agency on State Material Reserves of Tajikistan Chairman Nurmahmad Akhmedov and Commerce Minister Muhammad Makhdoom Amin Fahim. Sugar will be exported to Tajikistan against 100 per cent secured cash letter of credit (LC) to be opened by the government of Tajikistan through any first class internationally recognized bank. According to official handout, both the par- ties have, after thorough negotiations, agreed upon a draft commercial agreement except the provision of domestic transportation of sugar from mills to the point of delivery which will be fi- nalized as soon as the clarification, sought by the Ministry of Commerce from the ECC of the Cabi- net of government of Pakistan, will be received. The sugar will be exported at preferential rate of US$20/ PMT, lower than the international market price, (US$ 548.25 PMT as on 13th August, 2012- day of negotiations) in the wake of humanitarian cri- sis faced by the people of Tajikistan. Pakistan on request of government of Tajikistan, agreed to pro- vide 30,000 Metric Tons of white refined sugar through Trading Corporation of Pakistan (TCP) in compliance with the Economic Coordination Com- mittee (ECC) of the Cabinet’s decision. The government of Tajikistan, while appreciat- ing the goodwill gesture of Government of Pakistan, requested for early delivery of sugar to Tajikistan i.e. before the onset of winter season 30th Septem- ber, 2012). Pakistani side agreed to fulfill the com- mitment within shortest possible time. “The two sides also agreed to the point of delivery would be Amangarh, district Nowshera (KPK) and in this re- gard a commercial agreement between the two par- ties will be signed within next 15 days,” it said, adding, on the proposal of Secretary Commerce, the two sides agreed to explore the potential of bilateral trade between the two countries and will have a technical level meeting soon. Pakistan –Tajikistan sign sugar trade agreement Pour some sugar on me… and soon British bank agrees to settlement over accusations that it hid billions of pounds’ worth of transactions from authorities Dollar firms after bright US, European data TOKYO APP/AFP The dollar firmed against the yen in Asian trade Wednesday, lifted by promising US and European macroeconomic data, amid thin trade while investors stayed away for summer breaks. The greenback stood at 78.81 yen, firming from 78.73 yen in New York Tuesday afternoon. The euro was at $1.2328 and 97.14 yen, nearly flat from $1.2321 and 97.01 yen in New York. “Risk appetite isn’t bad,” a senior trader at a major bank in Japan told Dow Jones Newswires. The euro was seen to hover between $1.2250 and $1.2350 with bias on the downside after euro- zone GDP figures contracted in the second quarter, the bank trader said. “It feels like the pair has topped-out,” he said. Meanwhile, the dollar could climb above 79.00 yen, if more US data fuel optimism and if the upward trend of long-term US Treasury yields remain intact, said Masafumi Yamamoto chief forex strategist at Barclays in Tokyo. The market will also watch for any impact from regular US Treasury coupon payments Wednesday, he told Dow Jones Newswires. It’s getting bigger every second… Govt urged to control trade deficit LAHORE APP The Lahore Chamber of Commerce and Industry Wednesday urged the government to prepare a new policy in consultation with the private sector to effectively control the widening trade deficit and increase exports. LCCI President Irfan Qaiser Sheikh said here that the government should ban unnecessary import of luxurious items, adding that increase in trade deficit would have dire consequences for country’s economy therefore all future trade policy initiatives should be taken while keeping in view this problem. At the same time, he said, the government should also facilitate exporters and implement all trade facilitations in letter and spirit enshrined in trade and textile policies. Pakistan cannot sustain a high and growing trade deficit therefore the trade should be developed in close coordination with chambers of commerce. The chamber’s president said growing trade deficit, led by 4.7 percent decline in exports, was posing a key challenge to macro economic stability of the country, besides converting it into a consumer society. Trade deficit and inflation might dent country’s debt payment capacity that was not good for overall economy. He said apart from cutting the cost of doing business in Pakistan, the government would have to evolve a long-term strategy to make its products attractive in the global market to increase its exports. Irfan Sheikh suggested the departments concerned to join hands with private sector for finding out a methodology to scale up exports’ graph that was a prerequisite to control trade deficit. Green or gone to pay $340m fine to New York bank regulator NEWS DESK The British bank Standard Chartered has agreed to pay a $340m (£220m) fine to a US regulator which had accused it of to hide billions of pounds’ worth of trans- actions from the US authorities, leaving the financial system susceptible to “terrorists” and “drug kingpins”. The last-minute settlement – just hours before the bank had been due to appear before the New York department of financial services (DFS) – came after the bank’s chief executive, Peter Sands, to take direct control of the situation and despite his insistence that the allegations contained inac- curacies. The fine is the latest embarrassment for a UK bank, following the penalties slapped and . It is particularly damaging for Standard Char- tered – which is based in London but best known for its banking services in Asia and Africa – as its management, led by Sands, had been boasting just two weeks ago that it was “boring” and had a more conservative culture than its rivals. A week ago, the DFS said that Standard Char- tered had left the US financial system “vulnerable to terrorists, weapons dealers, drug kingpins and cor- rupt regimes, and deprived law enforcement investi- gators of crucial information used to track all manner of criminal activity”. Led by Benjamin Lawsky, the DFS said that the two parties had agreed that the problems included transactions of at least $250bn. This is the sum that he had included in his order last Monday. The bank conceded that $14m of transac- tions broke the rules and apologised for them. A hearing with the DFS originally scheduled for Wednesdayhas now been adjourned, but the bank may face penalties from other US authorities which are still investigating breaches of sanctions on Iran covering the period 2001 to 2007. There were sug- gestions last night that the $340m was half the fine the DFS had asked for. The bank said that a “formal agreement” with the DFS was expected to be com- pleted shortly and that it was continuing to work with other . The DFS alleged last week that one sen- ior banker remonstrated with a US colleague using the words “you fucking Americans” when warned of the potential breaches of US sanctions. The bank was wrongfooted and took eight hours to respond publicly. US regulators have traditionally worked together when investigating alleged breaches of rules and Lawsky indicated that the DFS would work with the other bodies involved, including the US Treasury, the Federal Reserve, the New York Justice Department and the District Attorney. New York governor Andrew Cuomo said he had created the DFS last year because “we believed that New York needed a tough and fair regulator for the banking and insurance industries to protect con- sumers and investors”. Courtesy: The Guardian PRO 16-08-2012_Layout 1 8/16/2012 4:58 AM Page 1
