ISLAMABAD: The financial support facilities provided by IMF and the US government to Pakistan and subsequent corrective measures undertaken by the State Bank have calmed restive markets and helped restore stability to the rupee, says the Asian Economic Integration Monitor.

The monitor, released by the Asian Development Bank on Tuesday, points out that the foreign exchange reserves of the country remain thin, continuing to pressure the balance of payments over the short term, however.

These vulnerabilities and high inflation will ease fiscal year 2013-14 growth to 3.4 per cent from 3.6pc in the previous fiscal year.

Conditions should improve this fiscal year as vital government reforms begin to gain traction, the monitor observes.

It points out that financial integration continues to deepen too, with an increase in cross-border equity and debt holdings and foreign direct investment.

Intraregional bank credit flows – particularly from Japan and Australia to other Asian countries – is emerging as an important source of stable external financing.

Asia’s intraregional trade share has risen to about 54pc in recent years and into early 2013, with trade between sub-regions rising, particularly for Central Asia as well as the Pacific. Asia-Pacific’s trade share with other emerging markets outside the region continues to rise while the trade share with the US and Japan continues to decline.

South Asia accounted for over 44pc of total remittance inflows to Asia, followed by East Asia (28pc) and Southeast Asia (21pc).

In value, the top five remittance recipients were India, China, Philippines, Bangladesh, and Pakistan.

As a proportion of total reserves, the top five recipients were Tajikistan, Pakistan, Armenia, Bangladesh, and Nepal.

The share of intraregional remittance inflows rose from 27.9pc in 2011 to 32.4pc in 2012, closing the gap between intraregional migration share and intraregional remittance share.