This technical advice provided by the staff of the IMF to the authorities of Afghanistan in response to their request for technical assistance (TA). The mission objectives were to assist the Da Afghanistan Bank (DAB) in improving the quality of the balance of payments and international investment position (IIP) statistics. The mission took stock of recent improvements in the ESS compilation practices and commended the DAB’s Monetary Policy Department (MPD) for achieving most of the 2018 TA recommendations. Despite the progress achieved, major shortcomings remain to be addressed to enhance the policy relevance of external sector statistics (ESS) data. The highest priority should be given to the improvement of personal transfer’s coverage and the estimation of unrecorded personal transfers. Remittances through autonomous Money Service Providers and informal channels are not captured; although, there seems to be a large remittance channel. The inclusion of the opium economy will have significant impact in the national and international accounts.

Abstract

This technical advice provided by the staff of the IMF to the authorities of Afghanistan in response to their request for technical assistance (TA). The mission objectives were to assist the Da Afghanistan Bank (DAB) in improving the quality of the balance of payments and international investment position (IIP) statistics. The mission took stock of recent improvements in the ESS compilation practices and commended the DAB’s Monetary Policy Department (MPD) for achieving most of the 2018 TA recommendations. Despite the progress achieved, major shortcomings remain to be addressed to enhance the policy relevance of external sector statistics (ESS) data. The highest priority should be given to the improvement of personal transfer’s coverage and the estimation of unrecorded personal transfers. Remittances through autonomous Money Service Providers and informal channels are not captured; although, there seems to be a large remittance channel. The inclusion of the opium economy will have significant impact in the national and international accounts.

Summary of Mission Outcomes and Priority Recommendations

1. A technical assistance (TA) mission on external sector statistics (ESS) was conducted in Amman, Jordan, during March 31–April 10, 2019, for the Da Afghanistan Bank (DAB).1 The mission took place at the request of the DAB and with strong support of the IMF’s Middle East and Central Asia Department. This mission is part of the Middle East Regional Technical Assistance Center (METAC) work program. The mission objectives were to assist the DAB in improving the quality of the balance of payments and international investment position (IIP) statistics. The mission took stock of recent improvements in the ESS compilation practices and commended the DAB’s Monetary Policy Department (MPD) for achieving most of the 2018 TA recommendations. The list of officials met by the mission is shown in Appendix I.

2. Despite the progress achieved, major shortcomings remain to be addressed to enhance the policy relevance of ESS data. Afghanistan’s balance of payments and IIP have considerable gaps in the coverage of the current and financial accounts. The major data gaps are related to unrecorded personal remittances, military aid, and illegal exports. Consequently, the level of errors and omissions is significantly high and persistent. The mission focused on (i) reviewing and suggesting improvements to the International Transactions Reporting System (ITRS); (ii) examining the recording of the foreign direct investment (FDI) of the other depositary corporations (ODC) in the balance of payments and IIP; (iii) assessing the data quality and methodological treatment of personal remittances and general government transfers; and (iv) evaluating the possibility of estimating opium exports.2

3. The highest priority should be given to the improvement of personal transfers (remittances) coverage and the estimation of unrecorded personal transfers. Remittances through autonomous Money Service Providers (MSPs) and informal channels are not captured; although, there seems to be a large remittance channel. Thus, the mission recommended to initiate—at the earliest convenience—the estimation of remittances that are not captured and urged that this be a permanent task in the DAB’s work plan. The mission welcomed the identification of grants received by the government—including recorded “on-budget” and “off-budget”—between current and capital transfers, but the offsetting entries (mostly related to services) are pending.

4. DAB should update the ITRS to improve the source data for balance of payments compilation. The mission considers that the ITRS data should be the main data source for the compilation of many of the ESS components. The MPD has implemented an ITRS that only collects ODC data, excluding the central bank from its coverage. The current ITRS— labor-intensive—is based on spread sheets (not associated with any data base), with limited data validations. This may be one of the causes of unrecording and misclassifications. The mission detected important discrepancies between the output data of the ITRS and the administrative sourced data. The updated ITRS proposed by the mission is a self-balancing system for the central bank and ODC. The ITRS revamping is a medium-term project will require an assignation of resources and should be supported by the DAB’s senior management.

5. The direct investment data have major limitations in their coverage and classification. To enhance practical experience in FDI data collection for nonfinancial direct investment enterprises, it was agreed to run a pilot survey for about 10 to 15 major FDI enterprises of different economic sectors. It is expected that the pilot survey will provide useful insights and facilitate running a full-fledged survey in Kabul. The mission welcomed the compilation of ODC FDI for the fourth quarter of 2018, based on a survey. To streamline the compilation, MPD will compile ODC FDI database on audited financial statements data.

6. The inclusion of the opium economy will have significant impact in the national and international accounts. The National Statistics and Information Authority (NSIA)—with the support of international organizations—is finalizing the incorporation of the illicit drugs production (opium) in the GDP calculation for 2016–18. The NSIA will provide to MPD the estimated illegal exports and imports data associated with narcotics. MPD should incorporate these data into the balance of payments and with the support of relevant DAB’s departments should prepare a model with the offsetting entries (including recorded and unrecorded imports, cash in vault, and others).

7. To support progress in the above work areas, the mission recommended a detailed one-year action plan with the following priority recommendations carrying particular weight to make headway in improving ESS:

Table 1.

Priority Recommendations

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Detailed Technical Assessment and Recommendations

A. Action Plan

8. The below action plan includes steps to accomplish milestones. The plan is for technical compilers. Actions are prioritized (high, medium, low) and priority recommendations identified. The status of the action plan recommendations of the 2017 and 2018 TA missions are shown in the Appendix II.

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Strengthening the Data Collection System

A. International Transactions Reporting System (ITRS)

9. The current ITRS provides data sourced from commercial banks and are used for compiling many of the of the balance of payments and IIP components. The focus should be on strengthening the ITRS data validation procedures. It is critical to reinforce the internal procedures, including the requirement of supporting documents from the banks for statistical outliers, and intensifying work with the reporting staff of the banks. The mission considers that the current ITRS coding should be simplified and customized to Afghan-specific transactions. In order to do not duplicate the data requirements to ODC, MPD should make a stocktaking of data collected by the Financial Transactions and Reports Analysis Center of Afghanistan.3

10. DAB should update the ITRS oriented to improve significantly the balance of payments compilation practices. The current ITRS—reported on quarterly basis—is labor-intensive, based on spreadsheets (not a database), and with minor validations at bank level. The mission considers that the current ITRS may be source of significant under coverage and misclassifications for the balance of payments compilation, including the exclusion of the DAB in its coverage.

11. The properly revamped ITRS is to serve as the main source of information for balance of payments compilation. Afghanistan faces major limitations on the source data quality for compiling ESS and further ITRS enhancements would be a pragmatic approach. Enhancements to the ITRS should include: (i) revised ITRS design with expanded coverage— including the central bank—and (ii) significant changes in data processing at all stages, from data entry and data transmission to data validation and processing of source data and of intermediate outcome.

12. The mission emphasized that ITRS enhancement project can only be implemented with strong support of the DAB’s top management. The ability of the MPD team to check data at the level of individual bank reports should be an intrinsic part of sufficiently trained staff, and Information Technology (IT) resources should be available.

13. The ITRS enhancement should have two main objectives: improved quality of the data and reduced costs for the banks. Therefore, design of the enhanced ITRS is to be based on the following fundamental principles: (i) the use of standardized coding system—aligned to the needs of Afghanistan—transactions, and positions; (ii) the data are to be derived from the core banking and linked directly to the bank’s operational day; (iii) data are to be collected and monitored centrally; (iv) the system is to be IT-backed and flexible enough to accommodate specific requirements of the respondents; and (v) applied IT and hardware that are compatible with a variety of IT platforms in the banks.

Prerequisites for ITRS Enhancement

14. The effectiveness of further ITRS improvements is subject to (i) strong top level managerial support in the DAB and well prioritized planning process; (ii) strong cooperation with reporting banks, including banks’ involvement in designing the reporting procedure starting from the initial implementation stage; (iii) sufficient IT and staff resources devoted to ITRS in the DAB and in banks; (iv) the level of IT development, (v) the quality of the design of report forms and procedures for the collection of information; and (vi) training of respondents.

15. Cooperation with the reporting banks during development of the enhanced ITRS is an imperative for success. Enough time should be given for the banks (ODCs) to make the necessary changes to their internal recording and for MPD to provide methodological support to link the ITRS reporting to banks’ operational day. It should be an elaborated promotion process of the enhanced ITRS to the banks’ management, and training of the technical staff involved in the ITRS reporting.

ITRS Reporting Procedure

16. The report form is to be submitted on direct correspondent accounts with nonresident banks and on the current accounts of nonresident clients. The report form is filled separately for each correspondent account with nonresident banks. The report form includes the following details: name of the bank, account number, reporting period, currency of the account, transacting domestic entity (bank, nonfinancial corporation, other financial institution, individual, government), code of transaction, country of transactions, and value of transaction (credit or debit).

17. It is preferable that the system converted into a closed system, on which banks are required to report all movements on each correspondent account together with the beginning and end of period positions. Appendix III provides an example of report form. Such design gives the basis necessary for data verification, the harmonization of data on transactions and positions, and validation with monetary and financial statistics (MFS). It should be understood though, that not all the movements on correspondent accounts will give rise to a balance of payments transaction. Therefore, a special code is to be assigned for the aggregated data on non-balance of payments—also denominated neutral transactions—and relevant written instructions with explanation of various neutral transactions are to be given to the banks. Appendix IV provides practical examples of neutral transactions.

18. Banks are to provide monthly aggregated data in a single electronic form. The form is to be accompanied with detailed instructions for respondents. In addition to existing transactions covered by current ITRS. Appendix V contains suggested codes for capital and financial account transactions.

ITRS Revamping

19. The Action Plan should have the following main components: (i) modifications in the ITRS design; (ii) development of the report forms with the explanatory notes; (iii) report forms’ field testing; (iv) development of the IT for all ITRS constituencies; (v) ITRS pilot testing for banks; (vi) ITRS implementation for banks; (vii) development of the ITRS initial data verification and validation procedures; (viii) elaboration of the ITRS intermediate data verification and validation procedures; and (ix) the ITRS consulting and training. The suggested general action plan for ITRS enhancement is given in Appendix VI.

20. The outcome of the joint DAB-banks ITRS working group should be the following: (i) update the ITRS report form—according to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) and customizing to Afghanistan’s specific needs—and draft explanatory note, (ii) ensure the consistency between the balance of payments reporting requirements and banking accounting practices, (iii) electronic data transmission and validation, (iv) effective list of the transactions codes, and (v) modalities of the ITRS consulting and training.

21. The major milestone is the development of relevant software and network reporting protocols for the banks. The enhanced ITRS IT should have segments: (i) initial data input, verification, and transmission to MPD; (ii) source data processing and validation; (iii) source data aggregation, conversion in one unit of account, validation of intermediate results for the reporting period; and (iv) intermediate data processing, time-series analysis, incorporation into the main balance of payments compilation. The ITRS IT support should be of a long-term nature to ensure sustainability.

22. There is a need to develop data verification procedures, which should be performed (i) when data are received from banks and entered into the MPD database; (ii) after worksheets are prepared; and (iii) when the aggregated ITRS data are prepared. The data validation procedure for initial banks data should include on-site banks inspections.

Recommended Actions:

  • • Strengthen the validation of the current ITRS

  • • Update the current ITRS coding and instructions for aligning to BPM6 and for streamlining/customizing to Afghan-specific transactions (remittances, other services, and others).

  • • Draft the initial technical requirements for enhancing the ITRS—including ODC and central bank, which should comprise resources needed, requested indicators, validation rules, submission requirements (format, periodicity, timeliness, and others).

B. Direct Investment for Nonfinancial Corporations

23. Data on direct investment of nonfinancial corporations have limitations on coverage and classification. The direct investment is compiled using the initial commitment (approvals) of the investors to invest in the licensed projects. The full commitment amount is currently registered under direct investment—equity in the balance of payments for the period when the commitment was made. The major limitations of this approach are:

  • I. coverage—often not all of the committed amount is invested, or investment could exceed the committed one;

  • II. timing—the committed amount is invested over the agreed investment period that, in most cases, could be a number of years; consequently, the committed amount should be registered in the balance of payments for the period when it was realized. If de facto investment by period is unknown, the committed amount should be equally split into the number of years/quarters of the implementation period; and

  • III. classification—the committed investment could be financed through three types of funds that include: (a) funds invested as equity capital, (b) loans from the parent company or from other affiliated entities, and (c) debt liabilities (loans, debt securities) to nonaffiliated creditors. These components should be classified in balance of payments respectively as equity, debt instruments, and debt securities (portfolio investment)/loans (other investment).

24. The mission is aware that the security environment in Afghanistan affects the ability to run a full-fledged direct investment survey for nonfinancial corporations. Previous TAs have recommended conducting an enterprise survey, with responsibility shared between the MPD and the NSIA. However, budget and security constraints have affected the implementation of this recommendation. In this context, the mission discussed different initiatives to address the data gap in direct investment data.

25. The mission recommended applying a pilot survey to the top 10–15 FDI enterprises in Kabul to evaluate the rate of response and reliability of this initiative. The selection of these top enterprises should include the main direct investment business operating in Kabul, and for this just one time, MPD staff will be responsible for conducting this pilot survey. The list of companies for the survey will be defined jointly by the Central Business Registry and Intellectual Property Department, the NSIA, and the current ITRS. The mission and MPD staff reviewed and agreed on the updated form to be used in the survey. The results of the proposed pilot survey will determine the feasibility of running a full-fledged survey for nonfinancial corporations in Kabul and/or evaluating alternative estimation methods of FDI.

Recommended Actions:

  • Define the enterprises to be included in the direct investment pilot survey—approximately 10 to 15 enterprises. The selected enterprises should be of the following industries: communications, hotels, postal services, agriculture, mining, and construction.

  • Conduct the direct investment pilot survey.

  • Base on the pilot results of the FDI survey, evaluate the way forward for running a full-fledged survey in Kabul.

C. Direct Investment for the Banking Sector (ODC)

26. The MPD has compiled FDI of the banking sector—fourth quarter, 2018—using a survey form. The mission welcomed the advance on the collection of FDI data; however, for optimizing the compilation process, the mission and MPD agreed that the direct investment data for the ODC will be the MPD’s responsibility, based on available information in the DAB’s Financial Supervision Department (FSD). For this purpose, the MPD to request access to audited statements at the FSD, following the internal confidentiality rules. Direct investment related transactions and positions sourced from banks financial statements available at the FSD should be consistent with those from the MFS, specifically on the liabilities side—Shares and other equity liabilities in the 2SR (code 512FODLQF_FX_XDC).

27. The mission trained MPD staff on compiling financial data—from audited financial statements—and the use of an excel template for estimating the FDI.4 The data to be collected are sourced by (a) income statements, (b) statements of changes in equity, and (c) equity composition of the banks (to identify the share of foreign ownership). Table 2 shows the hypothetically compiled data of the banking sector in line with the IIP statement. Table 3 shows the data to be included in the balance of payments for the banking sector.

Table 2.

Direct Investment Transactions and Positions: IIP Statement – Hypothetical Banking Sector

(Thousands of USD)

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Source: hypothetical data—do not correspond to Afghanistan’s banking sector.
Table 3.

Balance of Payments Direct Investment Transactions – Hypothetical Summary Table of the Banking Sector

(Thousands of USD)

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Source: hypothetical data—do not correspond to Afghanistan’s banking sector.

Recommended Actions:

  • Request access to audited financial statements of the ODC, following the DAB’s internal confidentiality rules.

  • Compile FDI data of the ODC for 2015–2107, sourced by the audited financial statements.

  • Compile FDI data of the ODC for 2018 Q1, Q2, Q3, and onwards, sourced by the updated direct investment survey for banks.5

D. Personal Transfers and Grants

28. The coverage of personal transfers (remittances) in the balance of payments compilation is limited and still needs to be expanded. The ITRS continue to be the data source for compiling personal transfers and only convers the remittances that go through the banking sector and MSPs attached to banks. Remittances that go through autonomous MSPs and informal channels—such as hawala—are not captured; although, it seems to be a large remittance channel. It was confirmed that the MTOs in Afghanistan do not have a centralized system from where the remittance data can be obtained.

29. The survey conducted to the autonomous MSPs have had good traction; however, the collected data are not significant for ESS compilation. The MPD considers that in the short/medium run, not significant improvements in the recording of remittances of autonomous MSOs and informal channels are expected.

30. Highest priority should be given to the estimation of unrecorded personal transfers, which is recognized as one of the major inflows of Afghanistan, using indirect data sources.6 The estimation of unrecorded remittances—through indirect data sources— should be a permanent activity in the DAB’s work plan and initiated at the earliest convenience.

31. A well-designed households survey can be an important source of information for estimating remittances. However, the mission was informed that the current households survey (conducted by the CSO) does not provide useful data for remittances estimation. MPD staff consider that adding a remittances section and fully implement the households survey— including data collection—may take a couple of years.

32. The use of models to complement the remittances estimation seems to be the way forward. The DAB should explore the available secondary data on migrant statistics such as migration of Afghans by destination, migration flows over the time, gender of the migration, migrants’ income by country/region, seasonality of the migration (if it is applicable), household income sourced from migrants by region, and other relevant data. The mission shared a couple of public academic papers related to remittances received by Afghans households—prepared by the Afghan Economic Society—and international migration data sourced by the United Nations, World Bank Group, and Asian Development Bank. Anecdotal evidence suggests that the remittances that are sent by hawalas and informal channels represent around 50 percent of the total remittances in Afghanistan.7

Recommended Actions:

  • Keep expanding the survey coverage for capturing MTOs and licensed hawalas remittances data.

  • The MPD in coordination with the relevant DAB’s department(s)—and with support of the DAB’s senior management—to prepare a work plan for estimating remittances not captured by the ITRS. The work plan to incorporate (i) responsible unit of the project and (ii) periodicity of the remittances estimations.

  • The MPD and other relevant DAB’s department(s) to investigate and collect available secondary data (national and international sources) that can be used to complement the remittances estimation.

  • The MPD to request to the NSIA adding a remittances section in the households survey for obtaining relevant data.

  • The NSIA to be incorporated into the project as a data source provider.

  • The DAB to estimate on regular bases the remittances not captured by administrative data or ITRS.

33. The mission welcomed the identification of the grants received by the government—including the recorded “on budget” and “off budget “—between current and capital transfers. However, the identification of offsetting entries is still pending, except for grants received in cash and of import of goods for the projects financed through grants. The method for estimating the counter entries for the general government grants—discussed in the 2018 TA—is presented in Annex II of the 2018 mission report.

Recommended Action:

  • Implement the current and capital transfers offsetting—such as grants in cash, technical assistance, and development projects—based on the Ministry of Finance information and following the model proposed in the 2018 TA mission.

E. Unrecorded Exports

34. The inclusion of the opium economy will have significant impact in national and external accounts. The NSIA—with support of international organizations—is finalizing the incorporation of the illicit drugs production (opium) in the GDP calculation for 2016–2018.

35. MPD will obtain from the NSIA the estimated data of illegal (i) exports of narcotics and (ii) imports associated with the narcotics production, to incorporate into the balance of payments. Considering the amount of exported illegal drugs, their inclusion in balance of payments statistics should be done only when the estimation method is proven to be reliable. The mission was informed that MPD staff are participating—as needed—in this project, so there is adequate interagency coordination. When the estimation method is accepted by the concerned agencies. MPD should incorporate these data into the balance of payments and with the support of relevant DAB’s departments should prepare a model with the offsetting entries of the narcotics exports—including imports, cash in vault and others. The offsetting entries may contribute to reduce the errors an omission in the balance of payments.

Recommended Actions:

  • Based on the NSIA estimations included in the GDP calculation for 2016 –18, the NSIA to provide to MPD estimated data of total of illegal exports of narcotics and total of imports not recorded in customs, related to the illegal production of narcotics.

  • Include in the balance of payments statistics, the estimated data of illegal exports and imports related to narcotic production (opium) for 2016–18 and prepare the offsetting entries of these data.

Other Issues

A. Reserve Assets

36. Currently, the DAB’s reserve assets are recorded at face value. The mission explained that according to BPM6, market prices should be used in ESS for valuing transactions and positions.8 Thus, the DAB’s Accounting Department should provide to the MPD reserve assets data at market prices for the compilation of reserves assets. The reserves assets compiled for ESS purposes should be consistent with the MFS data.9 Transactions are estimated as difference in positions at the end and at the beginning of the reported period and converted to USD by applying average exchange rate. As a result, the estimated transactions also include changes due to variation in exchange rate and price. According to BPM6 methodology, only “pure transactions” should be registered in the balance of payments; and exchange rate and price changes should be registered in the integrated IIP, under reevaluation. For estimating pure transactions, as well as exchange rate and price changes, compilers should request from the reserve management unit of the DAB (or other unit in charge) the currency and instrument composition of reserve assets.

37. The DAB will initiate the compilation of predetermined short-term net-drains on foreign currency. The mission noted that reserve-related liabilities are narrowly defined in BPM6 as foreign currency liabilities of the monetary authorities that can be considered as direct claims by nonresidents on the reserve assets of an economy.10 The mission further clarified the differences in concepts of reserve related liabilities (current positions, original maturity) and the concept of net drains (determined based on residual maturity foreign currency inflows and outflows to be received or paid within the forthcoming 12 months).

38. The DAB is considering reporting to the IMF’s Statistics Department (STA) reserve assets data—on regular basis—using the International Reserves and Foreign Currency Liquidity template (IRFCL). 11 The mission encouraged MPD staff to set up the compilation of the IRFCL that provides framework to consistently record foreign currency resources and net short-term outflow of these resources (scheduled and potential). In the next ESS TA, the mission will review the prepared source data for constructing the IRFCL, including the estimates of predetermined short-term net drains on foreign currency assets, to be submitted to STA.

Recommended Actions:

  • The DAB’s Accounting Department to provide reserves assets data to the MPD on accrual basis or market value—depending on the financial instrument and with the needed sectoral breakdown according to the reserve format (central bank, ODC, other financial corporations).

  • Use available data on reserves to complete the asset section of the template on IRFCL.

  • Review the data consistency between ESS and MFS on the reserve assets.

  • Develop a draft estimation of predeterminate short-term net drains on foreign currency assets (nominal value) for the following categories: (i) up to one, month, (ii) more than one month and up to three months, and (iii) more than three months and up to one year.

B. Technical Assistance and Capacity Development

39. The mission discussed the training needs of MPD officials. The mission emphasized the importance of participation of officials in ESS courses offered by the IMF’s Headquarters (Washington, D.C.) and IMF-Singapore Training Center. It was also stressed that it is of the utmost importance that officials directly involved in the compilation of ESS be nominated for future training.

Recommended Actions:

  • The DAB’s to nominate staff for training courses at IMF’s HQ, regional training centers, and other international organizations.

  • The MPD to always have staff trained in different duties associated with the ESS compilation; to manage eventual staff turnover and not jeopardize the needed improvement in the ESS.

  • Organize staff visits to partner countries for exchange of experience in compiling ESS (subject to funding availability). One of the priority topics of such visits would be the operation of the ITRS.

Appendix I. Officials Met During the Mission

The mission wishes to thank the officials of the MPD for their cooperation during its stay in Amman. Their assistance contributed significantly to the achievement of the mission’s objectives. The list of officials met by the mission is shown below.

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Appendix II. Progress in Action Plan of the March 2018 Mission

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Progress in Action Plan of the March 2017 Mission

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Appendix III. Report on Financial Transactions with Nonresidents

Appendix IV. Examples of ITRS “Neutral” Transactions

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Bank’s Reporting:

1. A resident bank sells EUR 100 to a bank abroad in exchange for USD. Assume EUR 1 equals USD 1,5 (see 1.5. above).

The resident bank reports the following information.

In Report Form on the nonresident EUR account a debit entry will be reported for EUR 100 with the neutral code for transfers (the position on the nostro account in EUR will decrease because of the sale).

In the Report Form on the USD account the position will grow as a result of the purchase of this currency, so a credit entry has to be reported with the code for neutral transfers at the amount of USD 150.

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BP = position at the beginning of periodEP = position at the end of periodNC = transaction with neutral code

This transaction is neutral as the asset position of the resident bank vis-a-vis banks abroad remains the same, while the currency composition of foreign assets has been changed.

2. Nonresident client A pays for goods to nonresident client В of the Afghani bank (see 1.4 above).

For client A, a debit entry with the code for neutral transaction will be recorded; and the credit entry for client B will be recorded in his account with Afghani bank.

3. Resident bank A pays USD 100 to resident bank B (see 1.2 above).

Bank A reports a debit entry of USD 100 with the neutral code. Bank B has to report credit entry of USD 100 with the neutral code.

Appendix V. Capital Account and Financial Account: ITRS Codes

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Appendix VI. Suggested Action Plan for ITRS Enhancement in Afghanistan

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1

The current security environment in Afghanistan precludes Fund staff travel to Kabul, Afghanistan.

2

Estimation and recording of military aid were not discussed during this TA.

3

The Financial Transactions and Reports Analysis Center of Afghanistan is the Financial Intelligence Unit.

4

The mission provided to MPD staff a detailed file which derives banks direct investment transactions and positions from financial statements.

5

The 2018 Q4 data is already included in the balance of payments and IIP.

6

Indirect data is also called secondary data.

7

See Barlas, A.W. (2018). An Assessment of External Remittance Contributions to Total Household Income: A Case Study of the Northern Provinces in Afghanistan. Afghan Economic Society.

8

See BPM6, paragraphs 7.69 to 7.73.

9

Minor differences may arise due differences on different exchange rates used in MFS and ESS compilation.

10

See BPM6, paragraphs 6.115 and 6.116.

11

MPD staff will benefit of a hands-on training on financial account compilation, which will cover the IRFCL compilation. The workshop will take place in Philippines during December 2019 and is financed by the Data for Decision Fund (D4D).