welcome to statistics department state bank of pakistan

Welcome to Welcome to

Statistics DepartmentStatistics Department

State Bank of PakistanState Bank of Pakistan

Being a International Investment Being a International Investment Position Data ProviderPosition Data Provider

Do you think it is important to be a International

Investment Position (IIP) data provider ? If it is really important to be so, to whom is he / she

important ? The objective of this presentation is to tell how

important the role of a IIP data Provider is.


Any discussion of being a data provider requires a discussion about the Any discussion of being a data provider requires a discussion about the stakeholders. stakeholders.

The job of a data provider requires professional The job of a data provider requires professional

skills,not only to understand and do his task but skills,not only to understand and do his task but also to serve and communicate with the users.also to serve and communicate with the users.

Failure to appreciate the importance of stakeholders Failure to appreciate the importance of stakeholders

often leads to poor Statistics.often leads to poor Statistics.


Who are the stakeholders ? Who are the stakeholders ?

Users Users

Legal,technical and Administrative Legal,technical and Administrative Support Support


To sum up,it is important to have a Mission and strategy.Therefore ,let us

have our Mission statement

“Our mission is to provide IIP statistics matching to the users needs”

And our Strategy would be

“To understand the users needs and meeting those needs. Develop and implement plans to supply

qualitative statistics”

What is International What is International Investment Position(IIP) ?Investment Position(IIP) ?

International Investment Position (IIP)International Investment Position (IIP)

DefinitionDefinition

“ The IIP is a statistical statement that shows an economy’s stock of external financial assets and

liabilities at a particular point. This stock is the result of past external transactions measured according to

current market values (current market prices and exchange rates) and other factors (for example, write-

offs or reclassifications) at a specific point. ”

International Investment PositionInternational Investment PositionConceptual FrameworkConceptual Framework

Conceptual framework-conceptsConceptual framework-conceptsInternational Investment Position (IIP)International Investment Position (IIP)

Stock of External Financial Assets and liabilities Stock of External Financial Assets and liabilities

(Financial Claims and Liabilities)(Financial Claims and Liabilities)

( Equity Assets and liabilities )( Equity Assets and liabilities )

(Financial derivatives) (Financial derivatives)

(Monetary Gold and SDRs) (Monetary Gold and SDRs)

Net IIPNet IIP Difference between owned and owedDifference between owned and owed

Conceptual framework-conceptsConceptual framework-concepts

Changes in IIPChanges in IIP Stock measured at a point in timeStock measured at a point in time

Changes between two time pointsChanges between two time points TransactionsTransactions

Non-transaction changes Non-transaction changes

( price changes,exchange rate ( price changes,exchange rate

movements,other changes ) movements,other changes ) ReconciliationReconciliation of the IIP Statement of the IIP Statement

OP + Tx + PC + XR + OC = CPOP + Tx + PC + XR + OC = CP

Conceptual framework-conceptsConceptual framework-concepts

Where :Where :OP = Opening PositionOP = Opening PositionTx = TransactionsTx = TransactionsPC = Price ChangePC = Price ChangeXR = Exchange Rate ChangeXR = Exchange Rate ChangeOC = Other ChangesOC = Other ChangesCP = Closing PositionCP = Closing Position

Conceptual Framework-Conceptual Framework-Relationship to other StatisticsRelationship to other Statistics

National net worth National net worth – IIP is partial balance sheet of economyIIP is partial balance sheet of economy– IIP + non-financial assets = National net IIP + non-financial assets = National net

worth worth

Conceptual Framework-Conceptual Framework-Other termsOther terms

IIP = Stock of External financial assets IIP = Stock of External financial assets

and liabilities and liabilities

“ “ Stock ” includes ‘Valuation’ and Stock ” includes ‘Valuation’ and

‘ ‘Timing’ And Timing’ And

“ “ External ”requires definition of External ”requires definition of

‘ ‘Residence’Residence’


Valuation Current Market Prices Book values as proxy for illiquid assets Nominal values for non-market items Net present value (NPV) for non-traded securities

Timing Time when claims and liabilities arise Based on accrual accounting

– Timing of ownership change – Proxy when recorded in books


Residence is an important attribute in IIPbecause the identification of transactions between residents and nonresidents underpins the system

Identical concepts of residence are used in BPM5 and the 1993 SNA


Three Questions:What is the institutional unit?What is the economic territory?Which territory is the unit closely connected

with?


The residents of an economy comprise the following

types of institutional units:

1. Households Includes the individuals who make up a household

2. Enterprises Financial and non-financial corporations Unincorporated businesses

3. Non profit institutions serving the households

4. Government


The economic territory of a country is the relevant geographical area to which the concept of residence is applied.A geographic territory administrated by a

Govt.within this,persons,goods,and capital circulate freely.

Free trade zonesUsually a country, but not necessarily

– Economic and monetary unions– International organizations like IMF and UN


Concepts of residence:Economic connection of a unit to an economic

territory– Not based on nationality or legal criteria– Not based on currency used

Expressed as a economic unit’s Center of economic interest


Center of economic interestDwelling,place of production, or other

premises,within the economic territory of the country on,or from,which the unit engages,or intends to engage,in economic activities and transactions on a significant scale,for an indefinite or long period


Households and Individuals– The BPM5 guidelines to be used for determining

residence:“ The presence or the intention to be present for a period

of one year or more” Exceptions

– Diplomatic representatives– Member of the armed forces– Students– Medical patients– Crew members


Enterprises– An enterprise has a center of economic interest

and is a resident unit of a territory when the unit is engaged in a significant amount of production and plans to do so over an indefinite or long period of time.

– One year guideline by BPM5


Particular types of enterprises Operator of mobile equipment

– The residency of airlines, railway, trucking and shipping will be based on the residence of the operating unit.

An enterprise operating in more than one economy– Divide operations-identify “unincorporated branch” as

separate institutional unit – Criteria used:

Separate accountSubject to income taxSubstantial physical unitReceive funds on its own account (not as an agent)

Conceptual Framework-Conceptual Framework-ClassificationClassification

Assets and liabilities As per balance sheetAssets-holders are residentsLiabilities –issuers are residentsFinancial claims and liabilities

Evidenced by a contract or security Specified payments of interest and capital


Equity claims and liabilitiesNo fixed claim / liability Financial derivatives Monetary gold and SDRs

– Assets with no corresponding liability


Direct Investment Obtain / sustain lasting interest in enterprise Significant degree of influence on management Practical definition

– At least 10 % holding of ordinary shares,voting power or equivalent

– Three Instruments – Equity – Reinvested earnings – Capital (borrowings)

– Reverse Investment


Portfolio Investment Equity and debt usually traded in organized

marketsInvestment for the purpose of portfolio

diversification instead of having influence on the management

Two Instruments – Equity securities(Less than 10% holdings)– Debt Securities (Short-term and Long-term)


Other Investment Trade Credits Loans Currency and Deposits Others

Reserves Assets Monetary Gold SDRs Reserves position in IMF Foreign Exchange Other

Data sources - IIPData sources - IIPDomestic Statistical Sources: Banks' External Assets and Liabilities Monetary Authorities’ External Assets and

Liabilities General Government External Debt Other sector

Domestic Non-statistical Sources Financial Statement Foreign Investment Approval Financial Press

International Investment PositionInternational Investment Position

Standard ComponentsEnterprises' survey Questionnaires

1. Schedule-I ( Branches of Foreign Enterprises )

2. Schedule-II ( Enterprises incorporated in Pakistan )

ThankThank YouYou

welcome to statistics department state bank of pakistan

Documents

iip statistics

closing position slide

cp slide

time changes

terms iip

owed slide

iip statement reconciliation

changes cp