Forex reserves rise to record $17.38b

Rupee weakens, overnight rates flat.

KARACHI: Foreign exchange reserves rose to a record $17.38 billion in the week ended January 29, up from $17.3 billion the previous week, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan (SBP) rose to $13.85 billion from $13.74 billion in the previous week, while those held by commercial banks fell to $3.53 billion from $3.56 billion, said the SBP.

Analysts said the increase was due to a rise in remittances. According to official data, remittances rose 17 per cent to $5.3 billion in the first six months of fiscal year 2010-11 (July-June).

Foreign exchange reserves were boosted last month by more than $633 million released by the US for military and logistical support in the fight against militancy. In May, the government received $1.13 billion - the fifth tranche of an $11.3 billion International Monetary Fund bailout programme.

In the currency market, the rupee ended weaker at 85.50/56 to the dollar on Thursday, compared with Wednesday’s close of 85.47/52 amid higher international oil prices.

In the money market, overnight rates were flat at 11 per cent on inflows of about Rs40 billion ($467 million) and dealers said rates are likely to stay on the lower side.

Published in The Express Tribune, February 4^th, 2011.