Autonomy, accuracy of data: IMF and government to set new benchmarks for SBP

The International Monetary Fund (IMF) and the government have agreed to put in place new structural time-bound benchmarks on State Bank of Pakistan (SBP) with the objective of ensuring its greater internal autonomy as well as accuracy of data and authenticity of transactions in line with best international practices.
Sources told Business Recorder that the IMF emphasis on the audit oversight of the SBP and internal checks and balances have been proposed because there is greater space for manipulation of data especially in terms of SBP profits and the generation of a 'good balance sheet'.
Sources further stated that internal audit would help discourage temporary transaction, if any, from any entity to show a healthy balance sheet at the end of every quarter. The audit is the only way of tracing such a transaction, they added, and cited the Federal Board of Revenue (FBR) that routinely collects advance tax at the end of every fiscal year to show a higher amount of revenue collection.
Sources added that the investment committee has probably been proposed by the IMF team to ensure that investment decision-making is taken by a group of people instead of an individual. An official on condition of anonymity stated that there is a perception that at present no one knows how this is carried out.
The new structural benchmarks agreed during the fourth and fifth review of $6.64 billion Extended Fund Facility (EFF) include; (i) a time-bound plan to improve the SBP's interest rate corridor by setting the policy rate between the floor and ceiling rates of the corridor; (ii) improve the internal operations of the SBP by (a) the investment committee of the SBP board will begin regular (at least four times per year) oversight and approval of the reserves management strategy and risk practices and (b) the authorities will provide confirmation that in line with standard IMF safeguard procedures, the Internal Audit Department will conduct reviews of the programme monetary data reported to the IMF, within two months after each test date, for accuracy and compliance with the TMU and share the findings with the IMF staff.
The government provides data on floor on Net International Reserves (NIR) with the SBP to the IMF, as well as ceiling on net domestic assets of the SBP, ceiling on SBP's stock of net foreign currency swaps/forward position, ceiling on overall budget deficit (cumulative, excluding grants and ceiling on net government budgetary borrowing from the SBP).