Forex reserves fall to $15.71b

KARACHI: Foreign exchange reserves fell to $15.71 billion in the week ended June 11, down from $15.87 billion the previous week, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan (SBP) fell to $11.97 billion from $12.14 billion a week earlier, while those held by commercial banks rose to $3.74 billion from $3.73 billion, said the SBP.

Foreign reserves hit a record high of $16.5 billion in October 2007 but fell steadily to $6.6 billion by November 2008, largely because of a soaring import bill.

Last month Pakistan received $1.13 billion as the fifth tranche of an $11.3 billion International Monetary Fund (IMF) loan.

The IMF loan package was agreed in November 2008 to help avert a balance of payments crisis and shore up reserves.

In the currency market, the rupee ended at 85.35/40 to a dollar, compared with 85.37/42 a day earlier and dealers said they expected the rupee to stay around current levels for now.

In the money market, overnight rates ended unchanged at 12.40 per cent, and dealers said rates were unlikely to fall this week as the interbank market was short of funds.

Published  in the Express Tribune, June 18^th, 2010.

US gor
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�A ȋ@ to ensure that funds under the Kerry-Lugar aid programme are used in a way which is effective and consistent with priorities of the two governments.

“We are still going through the process of how to spend the money in a best way as we want a meaningful use of the money.”

To a question whether spending in bits and pieces will reduce the impact of billions in aid over five years, he said the US government is keen to see visible changes after the utilisation of $7.5 billion worth of Kerry-Lugar funds.

“One does not want the money spread in a way which diminishes the impact and some significant multi-million-dollar projects have been initiated in the energy sector.”

CSF disbursements

Lipton said the US government made very strong efforts to resolve the issue of disbursement of the Coalition Support Fund (CSF). He said during the second half of this fiscal Washington transferred a significant amount, which helped control the budget deficit.

To a question why the US government did not transfer $500 million this year out of the $1 billion pledged at the donors’ conference in Tokyo, he said, “we are doing what we can to support development projects. The US government is mobilising a significant amount of money for agriculture, health and education projects.”

War on terror

Lipton said the US government is very appreciative of the government of Pakistan’s efforts in fighting the war against extremists. “It is fighting for the rest of the world.”

He said the money under the Kerry-Lugar Bill will help cope with the losses on account of the war on terror. He said sustainable growth would be the key to recover the losses, a message that Pakistan has to recover most of the $43 billion losses on its own.

He said Pakistan is in a comfortable position in relation to its international debt obligations as the debt-to-GDP ratio is still in the safe range.

Published in the Express Tribune, June 18^th, 2010.