Reserves not kept in gold, minister informs Senate](http://www.dawn.com/2003/09/27/nat6.htm)
ISLAMABAD, Sept 26: Finance Minister Shaukat Aziz on Friday told members of the Senate that Pakistan did not maintain gold reserves and instead it kept its assets in foreign currency reserves.
He said this while replying to a supplementary question raised by Pakistan Muslim League-Q’s Senator Anwar Bhindar.
The finance minister further explained that since cash was required to pay for imports and debt servicing purposes, cash reserves were maintained at a higher level than gold reserves, which could not be put to any immediate use. But, he maintained, the gold, confiscated by the customs authorities was kept in reserves, adding that the entire world had moved away from the gold standard because it did not add to the strength of the economy.
The minister said that the overall percentage of Pakistan’s foreign debt in relation to GDP was declining and the government would prepay an additional $1 billion besides meeting its normal repayment obligations.
The government, he said, was following a policy aimed at bringing down the level of foreign debt which was evident from the fact that the total debt had been reduced to $36 billion from $38.5 billion as a result of the government’s fiscal discipline during the past three years.
He said that as on June 30, 2001 and June 30, 2002, Pakistan owed to the International Monetary Fund $1.5 billion and $1.9 billion, respectively.
The total medium- and long-term external debt outstanding against Pakistan was $29.9 million as on June 30, 2002, adding that repayment of debt to the IMF during fiscal years 2000-01 and 20001-02 amounted to $262 million and $195 million, respectively.
Similarly, the repayment of different debt obligations by Pakistan amounted to $1.5 billion during 2000-01 and $1.2 billion during 2001-02.
The total outstanding debt of IMF as of March 30, 2003 was $2 billion while the total outstanding stock of medium- and long- term foreign debt payable by Pakistan as on March 30, 2003 was $30 billion.
Mr Aziz said that the foreign exchange reserves were kept in approved local and foreign banks depending on their risk rating. He said that central banks all over the world keep their foreign exchange reserves abroad with other central and commercial banks of international repute.
The State Bank of Pakistan, he said, also manages its foreign exchange reserves with the sole objective of ensuring security and safety of its reserves by placing them with other central banks as well as reputed international commercial banks. By keeping these funds abroad, the bank ensures that funds were not concentrated in a few banks and in a single geographical region to avoid inherent risks.
Mr Aziz informed that an amount of Rs178 billion was released under the National Finance Commission (NFC) award during 2001-02 to the four provinces. Of the Rs178 billion, Rs84.2 billion were released to Punjab, Rs49.6 billion to Sindh, Rs22.8 billion to the NWFP and Rs21.4 billion to Balochistan.
The Senate was informed that a financial assistance of Rs2.78 billion was granted to the drought-hit areas in Balochistan by national and international agencies during the past three years. Though no cash assistance was provided to any district, however, a total amount of Rs12 million was provided to different Divisional Commissioners for Relief/Rehabilitation activities in the famine and drought hit areas.
Three projects for the rehabilitation of agriculture and livestock were completed at a cost of Rs137 million. Four other projects, worth Rs112 million had been approved and would be implemented as soon as procedural formalities were completed.
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The above is surprising as the Statesman’s Year Book states ”Pakistan’s Gold Reserves were 2.07 Million Troy Ounces”
Can anybody explain?
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