$1.12bn payment expected from US this week
ISLAMABAD: The sliding rupee and the declining foreign exchange reserves are getting a temporary relief with the United States scheduled to transfer later this week about $1.12 billion to the State Bank of Pakistan as part payment for services provided to coalition forces.
Finance Secretary Abdul Wajid Rana informed a meeting of the Economic Coordination Committee of the cabinet on Tuesday that by the beginning of the next week, the country’s foreign exchange reserves would likely increase to $16 billion.
Pakistan’s total foreign exchange reserves currently stand at $14.77 billion which will go up to $15.89 billion with the inflow of $1.12 billion from the United States under the Coalition Support Fund.
The meeting was also informed that the last financial year had ended with a current account deficit of $4.5 billion which would keep the economy under pressure.
An official said that about 65 per cent of the bills submitted by the defence and finance ministry authorities to the US had been rejected, raising serious questions about the quality of billing.
Pakistan estimates to receive about Rs8.2 billion ($85million) from the United States during the current year under the Kerry-Lugar Aid programme and the amount is also likely to go up with the restoration of normal consultation channels, the official said.
Until May 2011, the defence authorities had billed about $12 billion to the US under the CSF. Most of the bills were disbursed except $3.5 billion that were still outstanding.
This amount did not include services provided to coalition forces in Afghanistan since May 2011 when the defence authorities stopped sending bills as relations started deteriorating in the wake of US action in Abbottabad which led to killing of Al Qaeda chief Osama bin Laden.
The official said that according to rough estimates the total outstanding amount on account of the CSF would be around $4.7-5 billion, including the previously billed amount of $3.5 billion. The monthly CSF bills averaged $100 million.
The ECC was informed at the meeting that consumer price indicator stood at 11 per cent in 2011-12 while it was 13.7 per cent in 2010-11. The wholesale price indicator remained at 10.4 per cent while it was 21.3 per cent in 2010-11. Sensitive price indicator remained at 7.15 per cent while it was 16.6 per cent in 2010-11.
Large Scale Manufacturing grew by 1.3 per cent in May 2012. Exports reached $24.66 billion and imports were worth $40 billion.