The State Bank of Pakistan (SBP) Thursday said the country’s liquid foreign exchange reserves continued to witness a sea-sawing trend and declined to $17.194 billion by the 10th of this month.
When compared with $18.063 billion of the previous week, the country’s current dollar reserves witnessed a dip of 1.4 per cent or $269 million in monetary terms. During the week under review, the State Bank counted its foreign exchange reserves at $14.340 billion against last week’s $14.602 billion, marking a decrease of 1.7 per cent. While the commercial banks hold $3.453 billion that has slightly decreased by $7 million, from $3.460 billion of the preceding week. The State Bank’s chief spokesman, Syed Wasimuddin, attributes this sea-sawing trend in the foreign exchange reserves of the central and commercial banks, respectively, to the routine repayment of debts and withdrawal by the account holders. Despite crossing the historic $18 billion mark, the country’s holdings of the greenback, the economic observers believe, are unlikely to help the rupee prevail against the dollar on a sustainable basis. The analysts opine that a major chunk, over $9 billion, of the current $18 billion reserves would be consumed by the cash-strapped Pakistan’s huge foreign debts that currently stagger at $58 billion. The resource-constrained government of Pakistan, reportedly, has to repay over $3 billion to the International Monetary Fund under the half-paid 2008’s $11.3 billion Stand-By Agreement. Last year, the country had used some $5.7 billion for the servicing of its international debts.
Rupee touches new low: Rupee hit a new low at 87.82 against the US dollar on Thursday, owing to increased import payments and negative sentiment that surrounding Pakistan’s economic outlook. However, it recovered slightly and closed at 87.60 as some support came in. A currency dealer at a foreign bank revealed that the rupee was changing hands against greenback at 87.82 due to high demand for import payments of around $100 million. Whereas it ended at 87.61 to the dollar, compared with Wednesday’s close of 87.57. The rupee hit its previous record low of 87.59 on Friday, but improved slightly due to higher remittances from Pakistanis expatriates. According to the official data, remittances rose 40.45 per cent to $1.31 billion in August, compared with $933.06 million in the same period last year. Though there were some inflows, dealers said negative sentiment about Pakistan’s economy was affecting the local currency.
