SBP keeps key policy rate flat at 12 per cent

KARACHI: The State Bank of Pakistan on Saturday announced it would keep its key policy rate unchanged at 12 per cent for the next two months in a bid to contain expected inflation in the second half of the 2011-12 fiscal year.

The announcement was in line with what the majority of analysts polled by Reuters earlier this week expected.

The central bank has left its key policy rate unchanged since cutting it by 150 basis points to 12 per cent on Oct 8, 2011.

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Pakistan, Sri Lanka sign agreements to promote cooperation

ISLAMABAD: Pakistan and Sri Lanka on Saturday signed three memorandums of understanding (MoU) to promote cooperation in trade, technical education and media between the two countries.

Prime Minister Syed Yousuf Raza Gilani and Sri Lankan President Mahinda Rajapaksa witnessed the signing ceremony here at the Prime Minister’s House along with the members of their delegations.

The first MoU was signed for cooperation in media by Federal Minister for Information and Broadcasting Dr Firdous Aishaq Awan on behalf of Pakistan while Minister for External Affairs Prof GL Peiris signed on Sri Lanaka’s behalf.

Advisor to PM on Finance and Economic Affairs Dr Abdul Hafeez Sheikh signed the second MoU while Sri Lankan Minister for External Affairs Prof GL Peiris signed the agreement on behalf of their respective government for credit of US dollars 200 million for improving Pakistan’s export from Sri Lanka.

The third MoU was signed by Secretary Ministry of Professional and Technical Education Qamar Zaman Chaudhry and Secretary to President of Sri Lanka Lalith Weerathunga on behalf of Sri Lankan government for enhancing cooperation in technical training in different fields.

The MoU was signed for the cooperation between National Vocational and Technical Training Commission (NAVTEC) of Pakistan and Tertiary And Vocational Education Commission of Sri Lanka.

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Indian minister arriving for trade talks

LAHORE: India’s Commerce Minister Anand Sharma will walk into Pakistan through Wagah border on Monday morning at the head of big trade delegation on a three-day visit to Pakistan for talks to normalise trade relations between the two countries.

During his stay, he is expected to visit a three-day exhibition of Indian products starting on Saturday at the Lahore Expo Centre and hold a series of meetings with his Pakistani counterpart Makhdoom Amin Fahim, officials and businessmen in Lahore, Islamabad and Karachi.

Mr Sharma was invited to visit Pakistan by Makhdoom Amin Fahim, who was the first Pakistani commerce minister to visit India last year in over three decades.

The visit has already generated huge interest in the both countries as it is billed to help break the non-tariff and tariff barriers between two largest south Asian economies. The visit is a sequel to commerce secretary level talks that resumed in April last year.

The direct trade between India and Pakistan constitute less than one per cent of their respective global trade. India exported goods worth $2.33 billion to Pakistan last year while its imports from the country were a mere $330 million.

While Islamabad maintains a positive list of less than 2000 items that can be traded officially, New Delhi has erected non-tariff barriers to restrict imports from Pakistan.

Pakistan’s cabinet recently approved in principle to give MFN (most favourite nation) status to India subject to elimination of non-tariff barriers against its exports. In return for dismantling of non-tariff barriers to its exports, Islamabad has agreed to switch over to a negative list of items by the end of this month.

Indian media have recently reported that New Delhi has agreed to sign three pacts – customs cooperation, mutual recognition agreements on quality certification and grievances redressing mechanism – for the removal of non-tariff barriers. But only the first pact is ready as India has some problems with the Pakistani draft on grievances redressing and has prepared a counter-draft.

In the meanwhile, Makhdoom Amin Fahim will inaugurate the India Show organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in collaboration with India’s commerce ministry with support from Pakistan’s commerce ministry and the Lahore Chamber of Commerce and Industry. Around 150 Indian companies will showcase their products.

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