Dollar reserves slide to $16.689 billion

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The country’s dollar reserves moved northward this week and contracted by 1.7 per cent to $16.689 billion up to February 3, the central bank reported Thursday. Unlike last week when the country’s dollar holdings had surged by $68 million to $16.870 billion, the week in review saw a decline of $181 million in the foreign exchange reserves of Pakistan. Even a 0.4 per cent increase in the commercial banks’ reserves could not help the country avoid a slump in its fast-shrinking holdings of the greenback and State Bank counted its reserves 1.5 per cent or $199 million less at $12.324 billion against previous week’s $16.870 billion.
Banks other than SBP managed to remain in the green zone and calculated their dollar reserves at $4.365 billion and $18 million higher than their previous reserves of $4.347 billion. The economic observers say contractions in the country’s foreign exchange reserves are mainly due to increasing import payments. Also, they believe, the retirement of external debts, which according to SBP have accumulated to over $60 billion, happens to be a major drain on the country’s reserves.