Even the PBS is unsure about rupee’s actual value

Statistics bureau applies incorrect exchange rate for trade figures, revises import, export figures

Shahbaz Rana September 13, 2017

ISLAMABAD: A day after authorities celebrated surpassing the $2-billion mark in exports during a single month for the first time in three years, the Pakistan Bureau of Statistics  (PBS) said that it erroneously applied an incorrect exchange rate and actual exports in August were $1.87 billion.

The error means that actual exports were revised downwards to $1.87 billion, while imports reduced to $4.95 billion. The trade deficit, hence, stood at $3.1 billion in August. However, the mistake is ironic since it adds fuel to the burning issue of an overvalued rupee, suggesting that there is confusion within official quarters over the true exchange rate.

Rupee sinks 3.2% against US dollar, Dar and SBP divided over explanation

The ‘honest mistake’ also comes at a time when there is debate in the country whether the government should devalue its currency to boost exports.

“The PBS would like to clarify that the figures of exports and imports presented in the summary trade statistics placed on the PBS website on September 11 for the month of August 2017 carried an incorrect number for the export and import figures in dollar terms,” announced the national data collecting agency.

“This occurred due to [the] use of [an] incorrect exchange rate for August 2017,” it added. The PBS said that the error has been rectified and correct numbers have again been placed on its website.

The mistake brings the issue of value of the rupee against the US dollar into discussion, as a relatively weaker currency may fetch more by selling the same quantity of goods. At the same time, it points towards the adverse implications of devaluation on imports.

Overall, the trade deficit during first two months of the new fiscal year would remain unchanged at $6.29 billion - higher by 33.52%.

“The PBS regrets its error and has put in place measures to ensure that such a lapse does not occur again,” according to the official handout. The PBS has now updated its trade data by applying the rupee value of Rs105.307 against a US dollar.

The September 11 mistake had created a sense of jubilation that the country finally managed to surpass the $2-billion monthly benchmark after a gap of three years. Even after the revision, the overall exports trend still remain healthy, depicting cumulative growth of 11.8% during July-August period.

Rupee dip ‘meant to fix imbalances’

The Ministry of Commerce has been making efforts to revive exports but it required support from the Ministry of Finance, which is delaying payment of refunds and rebates to the exporters.

The PBS said that as per the corrected numbers, the exports in August show a healthy growth of 14.41% over July - as against earlier reported figure of 26.85% growth. On a month-on-month basis, the exports in August would now stand at $1.866 billion. The exports were $235 million higher as against earlier officially claimed figure of $438 million.

Similarly, for imports, the data shows a low growth of 2.42% over July - as against earlier reported figure of 13.6%. In absolute terms, the imports in August stood at $4.95 billion - higher by $117 million over July. Earlier, the PBS had reported that imports in August increased to $5.5 billion - up by $657 million.

Resultantly, the trade deficit actually shrank by 3.7% in August over July. Earlier, the PBS had reported that the trade deficit in August widened by 6.8%.

Annual data

While rectifying its earlier figures, the PBS said that on an annual basis, exports grew by 12.89% in August over the same month of the last year. Earlier, the PBS had reported that exports grew 25.17% in August.

Acting SBP governor behind rupee plunge: Dar

Now, according to the revised data, Pakistan’s exports grew at a pace of 12.89% to $1.87 billion in August over the same month of the last fiscal year. In absolute terms, the country’s exports receipts increased by $213 million. Similarly, after the revision, imports grew at the rate of 15.1% and the country booked a $4.95 billion import bill. It is now $649 million higher than the previous year.

Consequently, the trade deficit would now stand at $3.1 billion in August over the same month of the previous year. In absolute terms, the deficit was higher by $436 million.

Published in The Express Tribune, September 13th, 2017.

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Haji Atiya | 2 years ago | Reply | Recommend @[email protected]: No, that's why SBP are getting guidance from the actuaries at PBS.
[email protected] | 2 years ago | Reply | Recommend PBS's job is not monetary policy, it's data crunching. Does its analog the SBP know about the rupee's actual value?
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