New Delhi: Pakistan's nuclear tests in May 1998 cost the country's taxpayers 22 billion Pakistani rupees, a media report has said.
The country also suffered a foreign exchange loss of over Rs 60 billion in the post-nuclear test period till June 2001 for open market operations, including currency swaps, with the Auditor General (AG) of Pakistan seeking an explanation on the matter, a report in the 'Daily Times' said.
"The AG claimed that the State Bank of Pakistan has made a startling disclosure after eight years before the Public Accounts Committee that the nuclear tests of May 28, 1998, cost the taxpayers about Rs 22 billion," the report said.
The report said the State Bank admitted that "following Prime Minister Nawaz Sharif's decision to freeze foreign currency accounts and subsequent economic sanctions by G-7 countries, the Finance Ministry under Sartaj Aziz approved the buying of dollars at much higher rates than those prevailing in the market to maintain reserves and pay foreign debt to avoid default on debt payments".
Top State Bank "bosses have for the first time confessed in writing to the PAC" that about 14 billion dollars were purchased at much higher than market rates during 1998-2004, which resulted in "a collective loss of about Rs 20 billion. Reportedly, up to Rs two per dollar were paid over and above the market rate of a dollar".
"These dollars were purchased from some powerful industrial and business groups of Karachi, private banks and Dubai-based parties who were paid about Rs 20 billion in addition to the conversion rate of dollars purchased", 'Daily Times' said, adding that "even after so many years, State Bank is still reluctant to disclose the names of these groups and dealers".
It said that the policy to buy dollars from the open market at much higher rates continued till 2004.
"While Shaukat Aziz was the Finance Minister, the State Bank also purchased 12 billion dollars from the market on higher than market rates", the report said.
It said that in order to justify the dollar purchase at higher rates, the State Bank top brass claimed that the then Nawaz Sharif government's decision to freeze foreign currency bank accounts led to a drastic fall in remittances after the G-7 slapped sanctions on Pakistan.
To maintain the required level of foreign reserves, Pakistan Finance Ministry approved buying dollars from the open market by paying Rs 20 billion premium on them, 'Daily News' said.
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