ISLAMABAD, Jan 4: The International Monetary Fund (IMF) has said that the State Bank of Pakistan has not developed as yet a reliable system for collecting data on the nature of foreign exchange flows intermediated by money changers in the kerb market.

“The larger unexplained flows of foreign exchange that entered Pakistan in the aftermath of September 11 make the need to establish credible estimates of these flows and their nature more urgent,” claims a latest IMF communication to the government.

The State Bank presumes that its purchases through money changers in the Gulf ultimately reflect remittances from Pakistani workers, but these, according to the IMF, may not be only part of the flows that go through the kerb market. Without any wider assessment of kerb market flows, total workers remittances could be largely underestimated, providing an incomplete picture of both capital and current accounts. The planned setting up of regular and structured surveys of the money changers’ operations should shed more light on these operations.

The authorities’ interest in a direct move towards subscription to the SDDS over the course of the three-year IMF new PRGF programme is very ambitious goal given the large existing statistical deficiencies and the fact that Pakistan does not currently participate in, or comply with the guidance on good statistical practice under greater world standards.

The feasibility of such a move and the related need for reforms and technical assistance will be assessed in the context of forthcoming IMF technical mission to prepare the data module of the Review of Standard and Codes (ROSC).

In the past, Fund officials believe, data weaknesses have complicated the analysis of economic developments and might have hampered timely policy responses. Under the impetus of technical assistance, including from the IMF, the authorities are making steady progress in addressing these weaknesses. To strengthen these efforts, the IMF programme incorporates steps to improve the availability, quality and timeliness of Pakistan’s economic and financial data.

In line with recommendations from the Fund Statistics department in the context of the ongoing action plan to improve national accounts, the programme includes specific steps that will lead to the production of new quarterly GDP series with a 1999-2000 base year, starting in fiscal year 2002- 2003. Progress in developing an array of Producer Price Indices will eventually result in the production of a methodologically correct and more reliable GDP deflator.

The following monthly monetary data on a last-Saturday basis, both at current and programme exchange, will be provided to the IMF within four weeks: monetary survey, accounts of the State Bank of Pakistan (SBP); consolidated accounts of the scheduled banks’ and banks’ lending to the government; daily data on SBP’s

Data of sale and purchases in the kerb and interbank foreign exchange markets, swaps and forward outright sales will be provided to the IMF within two business days.

Monthly data on the outstanding stock of the SBP’s foreign exchange reserves, with details on the currencies, instruments, and institutions in which the reserves held will have to be given to the IMF within one month. Quarterly data on bank credit to the nine major public enterprises (with breakdown), and on SBP bridge loans to banks in the context of the BSAC and any other quasi-fiscal operations will be submitted to the IMF within six weeks.