KARACHI – Pakistan’s foreign exchange reserves sustained its’ record break record-breaking spree and stayed at a high of $17.589 billion during the week, ending on February 19. Heavy dollars inflow, primarily due to mounting worker remittances and exports, has triggered the rise, the State Bank claimed.
Foreign currency reserves had also earlier hit a historic high of $17.447 billion in the last week, ending on February 15.
While, in the preceding week ending on February 5, foreign exchange reserves had slid to $17.314 billion after touching a record high of $17.386 billion a week earlier. According to State Bank of Pakistan, during the week under review, funds-starved Pakistan held a record foreign exchange of $17.589 billion, exhibiting remarkable growth of $142 million or 0.8 percent.
According to statistics by the central bank, SBP’s reserves had triggered the real difference and pushed the country’s overall foreign exchange holdings up. During the current week, the State Bank held $14.080 billion against $13.912 billion, showing a phenomenal growth of 1.2 percent or $168 million.
Last week, central bank’s reserves had surged by $146 million compared to $13.766 billion in the preceding week. Contrarily, foreign exchange reserves with commercial banks have continued to dwindle as a result of routine cash withdrawals by depositors. During the week under review, foreign currency reserves held by commercial banks fell by $25 million or 0.7 percent and reached $3.509 billion, compared to $3.534 billion held last week. This decrease stood at $13 million during the week ending on February 15.
Talking to Pakistan Today, SBP Chief Spokesman Syed Wasimuddin attributed the historic upward trend in the country’s dollar reserves to the heavy inflow of worker remittances and export receipts.
According to SBP figures, the country received foreign remittances worth $6.118 billion during first seven months of the current fiscal year, posting an increase of $920 million compared to last year’s $5.198 billion. Exports receipts were cited by the SBP spokesman as another major stimulus for foreign exchange reserves.
According to the State Bank, earnings stood at $13.172 billion during July-January 2010-11, up $2.22 billion or 20.29 percent against $10.950 billion in the corresponding period last year. The expected reimbursement of around $743 million by the United States on account of war expenditures, under the Coalition Support Fund, is also said to have pushed the foreign exchange reserves upward. Economic observers are upbeat that transfer of a further $500 to $700 million CSF during the second half would reflect positively on the country’s external accounts.
The country’s economic managers and observers expect that, if all goes well, cash-stripped Pakistan would see its workers remittances and exports revenues crossing, respectively, the $10 billion and $22 billion mark by the end of this financial year for the first time in the country’s history.
Official and unofficial analysts have warned deterioration in the country’s economic indicators, particularly the external accounts that, analysts believe, were expected to widen to $4.0 billion or two percent of the gross domestic product (GDP) during the ongoing second half of current fiscal.
However, perhaps realising gravity of the situation, the government has apparently opted for some fruitful measures to ensure dollar flow into the country.
A lift of ban from the export of foreign currencies and the opening of special booths at banks are some of the examples of government’s efforts to achieve the desired results.Availability of healthy foreign currency reserves is likely to help the country maintain parity in rupee-dollar value in open and inter-bank markets.
