economicletter
Pakistan
According to SBP, total deposits of all scheduled banks
stood at Rs.4.42 trillion at end-March 2010 against Rs.4.32 trillion
at end-December 2009, an increase of 2.3%. Gross advances stood lower
by 0.4% to Rs 3.25 trillion against Rs 3.27 trillion during the above periods.
Total assets grew by 0.8% to Rs 6.02 trillion against Rs 5.97 trillion at end-
March 2010 and end-December 2009 respectively.
The SBP has directed commercial banks and
development finance institutions to provide timely and
accurate information to all law enforcement agencies relative to any shady
transaction, as sought by them, lest any money laundering takes place.
The SBP is to progressively raise the export refinance
rate from the current 9% to 12.35% bringing it at par with six months
Treasury Bills rate.
The SBP has allowed import LC’s for second-hand
machinery opened upto June 30, 2010 as eligible for availing
refinancing under the Long Term Financing Facility (LTFF).
Pakistan’s bilateral trade with Turkey is projected to
reach a level of $2 bn by 2012 against $782 mn currently, given the
growth potential between the two countries.
Foreign portfolio investment in the bourses of the
country between July 1, 2009 and April 2, 2010, stood at $443.17 mn
aided by an investment of $156.35 mn in the first quarter of 2010.
China Mobile Communication Corporation (CMCC),
the world’s largest telephony operator, is to invest $ 300 mn in its Zong
network in Pakistan during the current year in addition to its investment of
$1.66 bn which generated 1,700 direct and 40,000 indirect jobs.
GDP growth is projected to rise next fiscal (July-June
2010-11) against an anticipated 3.3 in the current fiscal and realized 2%
in 2008-09.
Consumption of POL products (ex-non-energy) increased
by 11.2% in the first nine months of the current fiscal to 14.82 million
tonnes against 13.33 million tonnes in the same month last fiscal.
Based on arrivals of phutti (seed cotton) at the
ginneries, cotton production in the current season is tentatively
estimated to be higher by 12% at 12.69 million bales against 11.33 million
bales last season.
Markets at a glance
Weekly KIBOR (6months) Foreign Exchange Rates
Review Bid % Offer % GBP (£) Euro (€)
Beginning 12.15 12.40 Rs 128.78
Ending 12.11 12.36 Rs 129.01
Change -0.04 -0.04 +0.23
a weekly publication of The Institute of Bankers Pakistan
Consumer financing by commercial banks was lower
by Rs 46 bn outstanding at Rs.331 bn in the first eight months of the
current fiscal against Rs.419 bn in the same period last fiscal.
The NIB Bank has sold 27% of its shares (6.750 mn
ordinary shares) of its holding in Fullerton Asset Management
Company to NBP at a price of Rs.39.83 per share amounting to Rs.268.9
mn.
SPI inflation in the week ending April 1, 2010 was
higher by 18.24% over the same week last year. The weekly SPI
monitors changes in prices of 53 essential commodities, mostly kitchen
items, data for which is collected from 17 urban centes.
Liquid foreign exchange reserves of the country as on April 3,
2010 stood at $ 14.958 bn of which $ 11.062 bn was held by the SBP and
the rest with banks.
International
Moody’s Investors Service, an international credit
rating agency, has estimated that global Islamic Banking has a
potential to reach a level of $5 trillion over the next few years against its
current level of $950 bn.
Home remittances by expatriate Indians amounted to
$55.01 bn in 2009, a rise of 7% over 2008 of $ 51.6 bn. Comparatively,
China was at second place with an inflow of $48 bn and Mexico was at
third highest place with an inflow of $ 26 bn in 2008.
Bangladesh has received its first-ever credit rating
from Standard and Poor’s which has placed it at “BB-” in view of
a strong and stable economic growth outlook notwithstanding high levels
of debt and poor revenue collection. It would help the country attract higher
levels of foreign direct investment (FDI). The rating brings Bangladesh
relative to FDI prospects at par with 11 other countries including Indonesia,
Vietnam and Philippines and ahead of some other countries including Sri
Lanka and Pakistan.
China and Costa Rica have signed a free trade
agreement (FTA) under which the two countries would remove all
tariff barriers on Chinese exports of textiles, chemicals and machinery while
Costa Rica would be entitled to export coffee, meat, juice and some other
products free from any import duty into China.
>>
KSE Gold Rate
USD ($) 100 Index (10gm)
Rs 114.38 Rs 84.41 10416 Rs 30,514
Rs 112.50 Rs 84.03 10586 Rs 31,028
-1.88 -0.38 +170 +514
Volume 5, Issue No. 15  |  April 10, 2010
 a weekly publication of The Institute of Bankers Pakistan

The central bank of Sri Lanka expects the economy to grow at IBP Training Programs – This Week
a three-year high of 6.5% this year against the low of 3.5% in 2009. It
has also forecast GDP growth to be 7.5% per annum during 2011-13. The Karachi
country’s current account deficit stood at 9.8% of GDP against the IMF April 12-13
agreed target of 7% to come down further to 6.5% in 2010 and to 5% in Effective Business Writing Skills
2011. The country’s economy has a size of $ 42 bn.
April 14
Spain is to invest 17 bn euros ($ 23 bn) in a rail and Being an Effective Operations Manager
road project in part-effort to dent recession and create new jobs
which currently is highest in the eurozone area at 18.8% of workforce. April 15
The country’s current account deficit is also at a record level of 11.2% Customer Service Excellence for Managers
which it hopes to bring down progressively to 3% by 2013, the EU pre-
scribed limit. April 16
Operational Risk Management in Banks
Italy’s fiscal deficit rose to 5.2% of GDP in 2009 against
2.7% in 2008, well above the benchmark level of 3.0% prescribed by --------------------------------------------------------------
EU. The country’s public debt, one of the highest in the world, rose to 115% Rawalpindi
of GDP as the economy shrank by 5.1% last year. April 13-17
Certified Bank Tellers
The EU is considering imposition of bank-tax leviable --------------------------------------------------------------
in its 27-nation bloc across the board as per practice in some other Lahore
countries. If imposed on all financial transactions rate as in Sweden, April 13
it would yield about $17 billion and if imposed at the current rate level Effective Time Management for Improved Office Productivity
of the U.S., it would yield $50 billion. The amount would come handy in
case its financial sector experiences a repeat of the current global financial April 14
crisis. Cash Flow Based Lending

The Bank of England (BoE) and the European Central April 19-24
Bank (ECB) have left their key lending rates unchanged at 0.5% and Certified Bank Tellers
1.0% respectively. --------------------------------------------------------------
Peshawar
The Reserve Bank of Australia, the central bank of the country, April 13
has raised its key lending rate by 0.25% to a 14-month high level of 4.25%, SBP Prudential Regulations for Corporate & Commercial
lest the ongoing recovery fuels inflation. Banking

The U.S. Treasury has recouped $181 bn out of its bail-out April 15
package of $700 bn provided in the last quarter of 2008. How to Retain Customers in a Current Competitive Banking
Environment
Three top auto-markers of the world namely Nissan of --------------------------------------------------------------
Japan, Renault of France and Daimler AG of Germany have signed an Islamabad
agreement under which the three would exchange technology and capital April 14
to cushion themselves against any repeat of possible global recession. A Bank Lending: Legal Implication of Securities & Their
common fund of 2 bn euros ($ 2.67 bn would be setup over the next five Documentations
years for the purpose. --------------------------------------------------------------
Multan
April 19
Effective Customer Services : A Challenge
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Editor: Syed Mahdi Mustafa

Published by: The Institute of Bankers Pakistan, M.T. Khan Road, Karachi 74200, Pakistan
Phone: (021) 35689718, 35680783  |  Fax: (021) 35683805  |  Email: ibp@ibp.org.pk  |  Website: www.ibp.org.pk

General Disclaimer: IBP Weekly Economic Letter is based on information obtained from local and international print and electronic
media. IBP has not verified this information and no warranty, expressed or implied, is made that such information is accurate, complete
or should be relied upon as such. In no circumstance IBP and its team members would be liable for any incidental or consequential
damage that may incur from the use of information contained in IBP publication(s).

Volume 5, Issue No. 15  |  April 10, 2010