The country’s dollar reserves have slightly contracted to $17.470 billion during the week that ended on June 25, according to the State Bank of Pakistan figures released Thursday. This shows a decrease of $53 million or 0.3 percent when compared with the foreign exchange reserves of $17.523 million the country held the previous week.
According to SBP data, during the week under review the central bank’s held $14.022 billion against $14.107 billion of last week, registering a slump of $85 million or 0.6 percent. Dollar reserves of the commercial banks, however, remained in the green zone and ballooned slightly by $33 million or 0.9 percent to $3.448 billion against $3.415 billion the banks held a week earlier.
SBP Chief Spokesman Syed Wasimuddin says such nominal fluctuations in the banks’ reserves are because of routine cash withdrawals by the account holders. Driven primarily by exports and worker remittances, the current healthy dollar inflows are expected to take the country’s foreign exchange reserves to hit the record highs by the end of FY11, thus ridding the heavily-indebted Pakistan of its balance of payment woes at least in the foreseeable future.
The resource-constrained government will start to retire the half-paid $ 11.3 billion loans under the IMF’s 2008 Stand-By Arrangement from the next financial year, FY12. Analysts, reviewing the situation cautiously, suggest that Islamabad should take immediate and effective steps to lure foreign investment into the terrorism-hit country which, they believe, happens to be the sole and sustainable solution to the country’s balance of payment problems.
