The National Assembly was informed on Wednesday that the Federal Board of Revenue (FBR) has collected a total of Rs 1,745 billion under the head of taxes during July-April 2013-14. In a written reply to the House, Minister for Finance, Revenue, Economic Affairs, Statistics Ishaq Dar stated the increase made therein as compared to the last fiscal year has been 16 percent (Rs 239.4 billion) in absolute terms during the period.
While the target of amount to be collected during the last quarter of the current fiscal year was Rs 700 billion, he added. To another question about the year-wise rupee-dollar parity during the period from 2008 to 2013, he stated that the year-wise depreciation of Pakistani rupee against US dollar during the period from 2008 to 2013 was -11.7 percent in FY08; -16.0 percent in FY09; -4.7 percent in FY10; -0.5 percent in FY11; -9.1 percent in FY12; and -5.1 percent in FY13.
The minister said the PKR depreciation during the period under consideration was primarily a reflection of weak overall balance of payments (BoP) position. He said the macroeconomic situation deteriorated significantly in FY08 and the first four months of FY09 owing primarily to large exogenous price shocks (oil and food) in the international markets, global financial turmoil, adverse security developments, and policy delays during political transition.
He further said the external current account deficit widened to about $13.9 billion or around 8.2 percent of GDP in FY08. With a surplus in the financial account of the balance of payments (BoP) declining to $8.3 billion, from $10.3 billion in FY07, this led to a decline in the gross international reserves of the State Bank of Pakistan (SBP) of $4.8 billion, to $8.6 billion at end-June 2008, he added. He said reserves dwindled further to $3.5 billion as of end-October 2008, adding that these factors kept the PKR under pressure; and the currency depreciated by 11.7 percent during FY08 and 16 percent during the first four months of FY09.13
The Minister said the government entered into the IMF (SBA) programme in November 2008, which gradually improved the reserves level and eased the depreciation on PKR significantly. During FY11, he said that SBP''''s foreign exchange reserves touched the highest level of US $14.8 billion but PKR depreciated against US dollar by 0.5 percent only. While the deficit in the external current account remained low, capital and financial accounts continued to decline after FY10, he said, adding that these capital and financial inflows proved insufficient even to finance the small current account deficits in FY12 and FY13.
This along with a large repayment of IMF (SBA) loans, started since FY12, led to pressures on SBP''''s foreign exchange reserves and further fuelled the negative sentiments reflecting in the depreciation of exchange rate during FY12 and FY13, he added. To address the difficult situation prevailing during the initial months of the current fiscal year, he said the government has taken a number of steps, which include entering into an IMF programme, efforts to realise official inflows from different sources, including CSF money, 3G license fee, receipts of the Eurobond and inflows from multilateral and bilateral sources as planned in the budget.
In addition to significant inflows from multilateral and bilateral sources, he said that $1998 million has been received from the Eurobond, $1,500 million as capital grant, $1,406 million from the World Bank and ADB and $1050 million from CSF, he added. As on 27th June 2014, total foreign exchange reserves of the country stood at $13.990 billion, after touching a low of $7.578 billion as on 10th February 2014, he added.
He said the measures have already started yielding positive results: capital and financial flows from multilateral, bilateral and other official sources have started realising, which are reflected in calming market sentiments and recent strengthening of PKR to around Rs 98.33 per US Dollar in the interbank market.
The minister further said the depreciation of PKR against US dollar has primarily been determined by a reflection of weak overall balance of payment position and worsening of market sentiments. The stressed external position was mainly on account of weak capital and financial inflows that were insufficient to finance even low external current account deficit, he said, adding that this along with, large debt repayments predominantly those related into a drain in the foreign exchange reserves and has further fuelled the negative sentiments reflection on depreciation of the exchange rate. He said the situation also led to breed some speculative tendencies putting further pressure on the value of rupee.
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