Foreign exchange: Reserves fall to $17.97b from record high

Decline in reserves due to scheduled debt repayments: central bank.

Reuters August 12, 2011

ISLAMABAD: Foreign exchange reserves eased to $17.97 billion in the week ending August 6, from a record $18.31 billion the previous week, a senior central bank official said on Thursday. Reserves held by the State Bank of Pakistan (SBP) fell to $14.46 billion from $14.78 billion a week ago, while those held by commercial banks also fell to $3.51 billion from $3.53 billion, said SBP chief spokesman Syed Wasimuddin. “The decline in reserves during the week is due to scheduled debt repayments,” said Wasimuddin. Pakistan’s foreign exchange reserves were boosted in June by inflows of $411 million, including a loan of $191.9 million from the World Bank, and another loan of $196.8 million from the Asian Development Bank.

Higher export proceeds and a record inflow of remittances have helped Pakistan’s forex reserves grow steadily.

According to official data, remittances rose 38.57 percent to $1.1 billion in the first month of 2011/12 fiscal year, compared with $791.18 million in the same period last year.

Published in The Express Tribune, August 12th, 2011.