The Net Foreign Assets (NFA) of the banking system has contracted significantly by Rs 260.3billion in fiscal year 2011-12 which depicts a decrease of 33.4 per cent against corresponding period. According to the State Bank (SBP) Net Foreign Assets of the banking system contracted by Rs 260.3billion during last fiscal which shows a decrease of 33.4 per cent compared to an expansion of Rs 235.0 billion showing an increase of 43.1 per cent during the corresponding period of previous year. Contraction in NFA is mainly due to reduction in State Bank of Pakistan foreign exchange reserves that arose from the widening of current account deficit and deteriorating capital and fiscal account surpluses.
