Dollar inflows from what the central bank said multilateral donors and lenders helped the country’s foreign exchange reserves continuing its northward journey. The country’s holdings of the greenback grew by $ 17 million or 0.1 percent during the week ending on April 6, the State Bank reported Thursday. During the week under review, the country’s holding of the greenback swelled to $ 16.522 billion against $ 16.505 billion of the previous week that ended on March 30.
The upward trend in the foreign exchange is attributable to the central bank’s reserves that, during the review week, rose to $ 11.865 billion, registering a growth of 0.2 percent compared to last week’s $ 11.837 billion. The commercial banks, however, ended up in the red zone and calculated their reserves lower at $ 4.657 billion, down $ 11 million from $ 4.668 billion of the preceding week. According to SBP spokesperson, such up and downs in the banks’ reserves can mostly be attributed to the routine deposit and withdrawal of cash by the account holders. Cumulatively, past three consecutive weeks saw the banks’ dollar holdings contracting by $ 67 million. On the other hand, the central bank’s holdings of the greenback ballooned by $ 194 million, cumulatively. This relatively persistent increase in the reserves of the State Bank reflected positively on the dollar-hungry country’s foreign exchange reserves which, during last three weeks, swelled by $ 127 million. The country possessed $ 16.395 billion on March 16, $ 16.441 billion on March 23, $ 16.505 billion on March 30 and $ 16.522 billion up to April 6, the week in review. “The increase is because of the multilateral inflows,” Syed Wasimuddin, chief spokesman of the State Bank, told Profit. After hitting a record $ 18.31 billion mark last year in July, the country’s foreign exchange reserves are staggering at the $ 16 billion level with official and unofficial observers citing repayments on account of exports and external loans as a major drain on Pakistan’s dollar holdings. The economic managers are also wary of the hiking international oil prices that, as Finance Minister Dr Abdul Hafeez Sheikh told an award ceremony Tuesday last, is posing a major challenge to his resource-constrained government. The analysts believe that the present democratically-elected government was walking on a two-edge sword that, one on hand, was testing its nerves by taking harsh decisions, politically, like passing the impact of oil price hike to the inflation-hit masses or brace for a possible default on the balance of payment side.
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