Foreign exchange reserves rise to $17.5b

Current account surplus, high exports and remittance lend support.

KARACHI:

Foreign exchange reserves of the country have increased by $353 million to $17.52 billion in the week ended on June 11 compared with the previous week, when reserves stood at $17.16 billion, data released by the State Bank of Pakistan shows.

Reserves held by the State Bank rose to $14.09 billion compared to $13.73 billion in the previous week while reserves held by banks dropped to $3.43 billion against $3.44 billion in the previous week.

Foreign exchange reserves have been growing steadily due to a current account surplus, record remittances from overseas Pakistanis and record earnings from exports. The current account recorded a surplus of $748 million in 10 months (July-April) of the current financial year 2010-11 compared to a deficit of $3.46 billion last year, supported by a sharp rise in exports. In 11 months (July-May), exports surged 28 per cent to $22.5 billion due mainly to a hefty increase in prices of textile products in the international market.

Remittances sent home by overseas Pakistanis also provided a boost to the foreign exchange reserves. In July-May, remittances rose 25 per cent to above $10 billion for the first time in the country’s history.

Last year, release of loan installments by the International Monetary Fund (IMF) increased reserves of the country. Since November 2008, IMF has released around $7.8 billion of the approved amount of $11.3 billion.

Published in The Express Tribune, June 17^th, 2011.