Foreign exchange: Reserves show slight improvement

KARACHI: Foreign exchange reserves rose marginally to $16.87 billion from $16.80 billion in the week ending January 27, according to the central bank. Of the total, the State Bank of Pakistan holds $12.52 billion while commercial banks hold $4.35 billion. Reserves were boosted last June by inflows of $411 million, which included two loans from the World Bank and the Asian Development Bank. Higher export earnings and a record inflow of remittances have also helped support Pakistan’s foreign exchange reserves. However, Islamabad needs to start repaying an $8 billion International Monetary Fund loan in early 2012 which will put pressure on Pakistan’s foreign exchange reserves in the absence of additional sources of revenue.

Published in The Express Tribune, February 3^rd, 2012.