“The Cabinet has only given its in-principle approval to move forward on the issue (of MFN)... “We will give it the go-ahead if the situation is quite favourable and in the national interest. Otherwise, proceedings on it would be withheld,” Pakistan prime minister Yousuf Raza Gilani informed the media
Islamabad: Backtracking on granting the Most Favoured Nation (MFN) status to India, Pakistan prime minister Yousuf Raza Gilani has said the commerce ministry has only been tasked by the Cabinet to move forward on the issue in bilateral trade negotiations, reports PTI.
His statement came three days after Pakistan information minister Firdous Awan announced following a Cabinet meeting that it has been decided ‘unanimously’ to grant MFN status to India. Pakistan had been dilly-dallying on the issue since 1996 when India granted it the MFN status.
Since the Wednesday announcement of Ms Awan, right-wing extremists in Pakistan and business lobbies in the country’s crucial Punjab province have been vehemently opposing the decision. The business lobbies dealing with engineering and pharmaceutical products are of the view that granting of MFN status to India would be detrimental to their business interests.
“The Cabinet has only given its in-principle approval to move forward on the issue (of MFN) and permitted the ministry of commerce, which is actively engaged in trade talks with New Delhi, to negotiate with it trade-related issues,” Mr Gilani told reporters at his residence in Lahore.
“We will give it the go-ahead if the situation is quite favourable and in the national interest. Otherwise, proceedings on it would be withheld,” the premier was quoted as saying by the media.
Mr Gilani’s remarks came even as his Indian counterpart Manmohan Singh welcomed Pakistan’s decision to grant MFN status to India but said it should have been done long ago.
With contradictory statements coming from Pakistan, its high commissioner to New Delhi Shahid Malik Friday denied that Islamabad had taken a U-turn on granting the MFN status to India. “Let me correct you, there is no question of U-turn about it.”
After the information minister’s announcement on Wednesday, the Pakistan Foreign Office clarified that the Cabinet had only taken an in-principle decision on the issue and both countries would have to work towards the goal in further engagements.
The issue of normalising trade ties also figured in foreign minister Hina Rabbani Khar’s consultations Friday with top military officials, including ISI chief Lt Gen Ahmed Shuja Pasha.
Mr Gilani said the commerce ministry would have to make important decisions independently in bargaining with India over trade policy and hence it had sought the Cabinet’s go-ahead.
He contended the Cabinet did not have to refer decisions made on the MFN issue to Parliament.
“We can brief Parliament over the Cabinet’s decision of going ahead with MFN, but according to my point of view it is not necessary. Only Cabinet approval is necessary to negotiate with other countries,” he said.
Parliament would be briefed at an ‘appropriate time’, he added.
“Diesel is like any other commodity and (oil marketing) companies should be allowed to fix prices. The most appropriate time for doing it will be when inflation starts declining,” Prime Minister’s Economic Advisory Council (PMEAC) chairman C Rangarajan told reporters
Chennai: Prime Minister’s Economic Advisory Council (PMEAC) chairman C Rangarajan today pitched for freeing diesel prices but suggested that it should be done when inflation starts declining, reports PTI.
“Diesel is like any other commodity and (oil marketing) companies should be allowed to fix prices. The most appropriate time for doing it will be when inflation starts declining,” Mr Rangarajan told reporters on the sidelines of the three-day conference ‘Bancon 2011’, organised by Indian Banks’ Association and Indian Overseas Bank here.
Petrol rates are market-linked but the prices of LPG, kerosene and diesel are subsidised and hence government- administered.
Oil marketing firms raised petrol prices by Rs1.80 per litre on Thursday, a move which has come in for an all round attack with even UPA key allies, TMC and DMK opposing it.
Mr Rangarajan’s comments come a day after prime minister Manmohan Singh virtually justified the hike in petrol prices, saying there should be further movement towards deregulation of fuel prices and market should be allowed to find its level.
On inflation, that has been a constant cause of concern for the government and the Reserve Bank of India (RBI) for over 18 months, Mr Rangarajan said it should stabilise at 7% by March 2012.
Food inflation soared to 12.27% for the week ended 22nd October, while the overall inflation in September stood at 9.27%.
“Though inflation rates were mainly influenced by foodgrain and vegetable prices, it has now become generalised and spread even to manufacturing sector which has recorded at 7.4%,” Mr Rangarajan said.
He also said that RBI’s raising its policy rate would help rein in inflation.
“I hope that by December-January, inflation would break and around that time perhaps a reversal policy is possible which would keep deficit near budget levels,” he said.
Mr Rangarajan, a former RBI governor, also cautioned that public sector banks need to watch out for liquidity risk in real estate, infrastructure, power and aviation sectors.
Asked whether corporate entities should be allowed to foray into the banking space, he said “it is debatable. But, if proper applicants fit in from the non-corporate business segment, they should be considered.”
He stressed upon the need for cautious infusion of capital into state owned banks as the government may need to step-in for supplementary demands for grants between Rs4,000 and Rs10,000 crore to meet the capital requirements (of banks) as against the Rs6,000 crore budgeted for this year.
US options & futures holders will be forced to deposit billions in additional capital to the CME to avoid margin calls. This may pressure all asset classes on Monday
There is a liquidity crunch in the options & futures markets for commodities worldwide. CME, the exchange for such transactions in the US, had made the initial margin and maintenance margin equal for every commodity with options and futures. This implies that options and futures holders will be forced to deposit addition capital to the CME in the form of maintenance margin, simply to hold their positions. This will put markets under pressure on Monday. The lack of liquidity and additional margin requirement comes in the aftermath of the bankruptcy of MF Global.
The London Metal Exchange has suspended MF Global from trading with immediate effect, following a similar move by the CME Group, which operates the Chicago Mercantile Exchange, Chicago Board of Trade and New York Mercantile Exchange. MF Global had filed for bankruptcy protection following bad bets on euro-zone debt. The brokerage’s meltdown in less than a week made it the biggest US casualty of Europe's debt crisis, and the seventh-largest bankruptcy by assets in US history.
One of the biggest market concerns now is systemic liquidity, which is virtually non-existent. Interbank liquidity in Europe is at an all-time low, and possibly for the US banks. But this is just as true at the commodity exchange level, where it appears the aftermath of the MF Global collapse is just now being felt. CME's margin hike will force market players to cough up billions of dollars in a single day. Since this cannot be easily procured in one business day, we may see margin calls and forced liquidations of margin accounts across America and the world.