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A N NE X UR E 7 : P L A NN I NG C O MM I SSI O N G U ID EL I N ES O N C A L C UL A T I N G P A KI S T A NI R UP EE ( P KR ) E Q U I VA L E N T OF T H E F O R E IG N E X C H A N GE C O MP O NE NT ( FEC ) O F P R O JE C T S

GOVERNMENT OF PAKISTAN

PLANNING COMMISSION

MINISTRY OF PLANNING & DEVELOPMENT (Office of Advisor (Dev. Budget)

No.4(1) PIP/PC/2013-14 Islamabad, October 24,

2013

SUBJECT: CONVERSION OF FOREIGN EXCHANGE COMPONENT OFDEVELOPMENT PROJECTS IN PAK RUPEE

The Executive Committee of the National Economic Council (ECNEC)

in its meeting held on August 28, 2013, while considering various development projects, inter alia, decided that:

“The projects wherein foreign exchange component is involved; the summaries should invariably indicate the current exchange rate and

the project cost should be calculated accordingly”.

2. In the subsequent ECNEC meeting held on September 13, 2013,

Ministry of Planning & Development reported to the ECNEC the difficulties that may be faced owing to fluctuation in rate of exchange, almost on daily

basis. The Chairman, ECNEC directed M/o Planning & Development to decide the issue in consultation with Finance Division.

3. The issue was discussed between Ministry of Planning & Development

and Finance Division and the following procedure has been approved by the Chairman, ECNEC for conversion of foreign exchange component of

development projects in Pak rupee: Where foreign aid/foreign exchange component of the cost of the

project changes solely due to fluctuation in exchange rate, the cost (s) of foreign aid/foreign exchange component of project should be

worked out on the basis of “Bank’s Floating Average Exchange Rate”

* in the respective currency/currencies, reflected on the website of the State Bank of Pakistan, of the month preceding the one in which

the PC-Is/PC-IIs were submitted to the Ministry of Planning and Development. However, at the time of consideration of project by

the CDWP/ECNEC, the sponsors of the project would furnish modified item-wise cost of foreign aid/foreign exchange component based on

the preceding month’s average State Bank’s Floating Exchange Rate to the Ministry of Planning & Development. In case of revised projects

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submitted for consideration of CDWP/ECNEC the same principle

would apply but only for the yet unmet costs and expenditures that are likely to be impacted solely by the fluctuation in exchange rates.

4. Ministries/Divisions/Provincial Governments/Governments of AJ & K

and Gilgit-Baltistan/FATA are requested to convey these instructions to all

concerned for guidance and compliance.

5. However, instructions regarding “Approval of Schemes Revised on Account of Delinking Pakistan rupee from Dollar” contained in Cabinet

Division O.M. No. 171/CF/84 dated June 27, 1984, would continue to remain in force where applicable (copy enclosed)

-Sd/-

(Muhammad Asif Sheikh) Advisor (Dev. Budget)

1. All Secretaries/ Additional Secretaries/ (In charge) of Federal Ministries/Divisions

2. Chairman, NHA, PAEC & WAPDA

3. Chairman, Planning & Development Board Punjab/ Additional Chief Secretaries

(Dev.) Sindh, Khyber Pakhtunkhwa, Balochistan, AJ&K, FATA/ Secretary P&D), Gilgit-Baltistan

* http://sbp.org.pk/ecodata/IBF-Rates.pdf