SBP Provided Rs 91.6 BLN to Commercial Banks

Lahore, Pakistan news: The State Bank of Pakistan has provided Rs 91.6 billion to the commercial banks to inject liquidity into the Money Market.

The central bank received offers of Rs 94 billion for re-buying T-bills and Pakistan Investment Bonds (PIBs) by operation market operation. The central bank accepted offers of Rs 91.6 billion. The central bank bought back PIBs and T-bills under 7-day reverse-repo at interest rate of 11.09 percent.

SBP Issues New 500-Rupee Notes

KARACHI, Pakistan News: State Bank of Pakistan (SBP) has issued new currency notes of 500 denomination with stepped up security features as guard against counterfeiting.

According to the SBP spokesman Waseemud Din, Pakistani flag has been added to the 500-rupee note, adding the green part of the flag has been added to the note with optical variable ink with crescent and star on it.

Earlier, this anti-counterfeit special feature was present in 5000 and 1000-rupee notes.

According to the central bank spokesman, these new currency notes in the denomination of 500 have been issued with the signature of the SBP governor Salim Raza.

SBP Sees Little Impact From Dubai, Remittances Up

KARACHI, Pakistan news updates: Pakistan sees little if any fallout from Dubai’s debt crisis and expects remittances from its workers overseas to grow despite problems in the Gulf, the central bank governor said on Thursday. Risk premium is improving and it could see inflows if investors decide to leave Dubai, said State Bank governor Salim Raza.

“Pakistan is by and large little exposed to Dubai investment and Dubai institutions therefore the downside is limited but if people really take assets out of Dubai we could see some small upside,” Raza told Reuters in an interview. Dubai shook the financial world last week when it said it would ask creditors of Dubai World, the conglomerate behind the emirate’s rapid expansion, to delay payment of billions of dollars in debt.

The Dubai crisis comes as Pakistan’s risk profile has been improving. Pakistan’s five-year credit default swaps were quoted at 742.5 basis points on Wednesday compared with 3,509.022 basis points in October last year, before Pakistan turned to the International Monetary Fund for an emergency loan package. “With the consistent improvement in Pakistan’s risk profile, people may look at Pakistan if they are looking at getting out of Dubai,” Raza said.

HIGH RATES The Dubai crisis was also not expected to hurt remittances from overseas workers, he said. Up to a million Pakistani workers are in Dubai, while the number of workers in the UAE all together is about 2.5 million.

Raza said Pakistanis who lost jobs in Dubai might find work elsewhere and overall, the numbers of Pakistanis working overseas would not fall. “Net, I think we would be flat or positive … the number isn’t going to decrease,” he said. Pakistan gets $8.5 billion a year from its overseas workers, equivalent to up to 5 percent of gross domestic product.

“It is important. That is the size of our current account gap,” he said. According to the latest official data, remittances from Pakistanis working overseas rose 32 percent to $3.1 billion in the first four months of the 2009/10 (July-June) fiscal year. The UAE contributed $679.23 million, out of which $298.82 million came from Pakistanis working in Dubai.

High interest rates were also helping draw money back to Pakistan, despite a weakening rupee, and more of the flows were coming through official channels, he said. “Interest rates have helped retain money and transfer money, plus we’ve encroached a little into the grey market,” Raza said. “I’m confident we’re certainly not going to see a reversal (of the flow of remittances). The question is how fast we can improve on it,” he said.

Policy rate has been coming down this year as inflation has eased. The central bank last week cut the policy rate by 50 basis points to 12.5 percent for December and January to spur economic growth, but it remained cautious because of the country’s security situation. Inflation eased to a 22-month low of 8.9 percent year-on-year in October and both current account and fiscal deficits have been improving. Economic growth fell to 2 percent in 2008/09, its slowest in eight years, but the central bank expects it to firm to 2.5-3.5 percent this year.

SBP Writes off the Loans for Agriculture-Affected Areas of Terror

KARACHI,Pakistan news Updates: The State Bank of Pakistan has announced to write off agricultural loans for the areas affected by terrorism under Prime Minister’s relive package.

SBP has issued directives to the banks to immediately stop collection on Rs560 million loans comprising principle and mark up in Malakand Division and tribal region. These loans should be treated as cleared.

The central bank also directed the banks to undertake extensive advertisement of this scheme and make announcements of waiving the loans for the areas in question.

Spokesman SBP Karachi has instructed the borrowers to submit their applications at their respective banks up to Dec 25.

SBP to Announce New Policy Monitor Today

KARACHI,Pakistan News update: State Bank of Pakistan Governor Saleem Raza has said that new monitory policy will be announced on Tuesday.

According to details, he said foreign exchange reservoirs had reached to the stage of five months from three weeks.

State Bank Governor maintained that national economy was improving, adding that exports and credit demand were increasing.

He told that foreign exchange reservoirs are enough to fulfill the needs for five months.

SBP Sets New Deadline For Cnics

KARACHI: The State Bank of Pakistan (SBP) on Wednesday asked banks to block all accounts on December 31 of such customers who have not yet submitted their national identity cards.
It asked banks to inform their customers through print and electronic media that upon the expiry of the extended deadline, accounts without CNIC will be blocked for all debit transactions and withdrawals, irrespective of mode of payment, until subject regulatory requirement is fulfilled.

“Debit block option should be exercised after one month’s prior notice is served upon such customers who have not submitted copies of their CNICs.”

SBP Buys 74.7bn Rupees Govt Paper

KARACHI : The State Bank of Pakistan (SBP) bought back 74.7 billion rupees ($901 million) of Treasury bills and government bonds on Saturday in 7-day and 14-day reverse-repo contracts at 12.20 and 12.25 percent respectively to inject funds into the money market.

SBP Revises FX Interbank Deal

KARACHI: SBP has re-engineered its process relating to treasury operations internally for FX interbank deal/trade confirmations and settlements, and is bringing the same in-line with the best int’l practices.

According to SBP circular addressed to all banks (authorized dealers) / all Islamic banks here on Wednesday, as per existing practice, banks provide deal/ trade confirmations to Domestic Markets and Monetary Management Department (DMMD) of SBP while they provide PKR debit/ credit authority letters to SBP BSC (KO).

Further, SBP BSC (KO) is also currently handling the FX settlements of interbank deals/ trades and related issues/ queries of the banks, if any.

The State Bank has informed the banks that it has re-engineered its process relating to treasury operations internally for the captioned subject and is striving to bring the same in-line with the best international practices.

All banks/ Islamic banks are advised to ensure compliance to the following instructions:

All FX Interbank Deal/ Trade (between SBP and counterpart) Confirmations (either through SWIFT Message MT-300 or letter via postal mail) shall be directly exchanged with Treasury Operations Department (TOD) of SBP with effect from Oct. 5, 2009.

Treasury Operations Department of SBP will exchange/ provide confirmations with/ to banks through SWIFT (MT-300) or letter sent via postal mail.

All Deal/ Trade confirmations shall clearly stipulate the particulars along-with settlement instructions, in case the confirmations are provided to SBP via postal mail.

Treasury Operations Department (TOD) of SBP would start settlement of all FX interbank transactions (new trades as well as prior maturities) with the banks with effect from 5th October, 2009. All debit authorities relating to PKR settlements shall be provided to SBP BSC (KO) as per the existing practice.

In case of PKR receipts at maturity, banks are allowed to use SWIFT MT 210 instead of hard copy letter sent to SBP BSC (KO).

The cut-off timings for PKR settlements shall be the normal business hours i.e 1:30 p.m from Monday to Thursday & Saturday while12:30 p.m for Friday.

Since Treasury Operations Department (TOD) of SBP would deal with settlements and confirmations of FX interbank transactions instead of SBP BSC (KO), therefore all FX Interbank confirmations/ settlements related matters/ issues shall directly be communicated to TOD of SBP from 5th October, 2009 onwards.

All banks are advised to provide their Standard Settlement Instructions (SSIs) to Treasury Operations Department of SBP immediately.