Pakistan to set up two funds to tackle financial crisis

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Islamabad, Oct 23 (UNI) Pakistani Prime Minister's Advisor on Finance Shaukat Tareen today said two funds valuing 50 billion Pakistani rupees will be set up to tackle financial crisis and bring stability in the Stock Market and restore confidence of investors.

Announcing the launch of the funds at a news conference in Islamabad, Mr Tareen said Rs 20 billion non-resident fund has been created to encourage overseas Pakistanis to invest into the stock markets.

He informed the National Investment trust would manage the fund while the government would be the guarantor of the fund.

Under the fund, the overseas Pakistanis would purchase shares of seven to ten state-owned organisations, including Oil and Gas development Corporation, National Bank.

Mr Tareen added that another fund amounting to Rs 30 billion has been created to give premium to safeguard the interests of the shareholders.

The advisor said these steps would not only stabilise the stock markets but also enhance investors' confidence into Pakistani stock markets.

Mr Tareen said their desire was to strengthen and support the stock markets and banking system and in this connection, ''We initially injected two hundred and seventy billion rupees in banks to restore depositers' confidence and handle credit crunch.'' Rs one hundred and eighty billion had already been injected into the banks while another 90 billion would be provided during the next month, he claimed.

He said the government intends to build up its foreign exchange reserves to restore confidence of investors on the economy.

Responding to a question, the Finance Minister expressed the confidence Pakistan will be able to bridge its financing gap of three to four billion dollars in a short span of 30 days under the A and B plans aimed to seek assistance from multi-donor agencies and friendly countries respectively.

He said if the two plans fail, then Pakistan would move the IMF for a bailout under Plan-C. The advisor however clarified that the government would take loan from the fund on the terms and conditions set out by them.

About talks with the IMF, he said Pakistan has not yet formally requested facility from the IMF. ''We will approach the IMF when all options are closed.'' Responding to a question about meeting of the friends of Pakistan, a grouping formed last month to help the cash-strapped South Asian nation to handle financial crisis, he said the participants of the forum have assured to provide all possible assistance to Pakistan at this critical time.

Mr Taureen said besides cash grant, the government wants free trade agreements and free access to markets from the countries in the friends of Pakistan forum.

He also expressed the confidence that Saudi Arabia will extend the oil facility to Pakistan through this forum.

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