Forex reserves fall to $16.5b

KARACHI: Foreign exchange reserves fell to $16.5 billion in the week ended on July 30, from $16.56 billion a week ago, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan (SBP) fell to $12.72 billion from $12.77 billion a week earlier, while those held by commercial banks also fell to $3.78 billion from $3.79 billion, said Syed Wasimuddin, the SBP’s chief spokesman.

Forex reserves rose to a record high of $16.77 billion in the week ended on July 2, thanks to foreign inflows worth $750 million received during the week. The previous record high was $16.45 billion in October 2007.

In May, Pakistan received $1.13 billion, the fifth tranche of an $11.3 billion International Monetary Fund (IMF) loan. Pakistan and IMF officials are due to meet from August 23 to September 2 to discuss the approval of the sixth tranche.

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

In the currency market, the rupee ended weaker at 85.70/77 to a dollar, compared with Wednesday’s close of 85.64/70 and dealers said the rupee could come under pressure in the short-term because of higher demand for dollars for import payments.

In the money market, overnight rates ended lower between 12 and 12.15 per cent, compared with Wednesday’s 12.50 per cent. Dealers said there were no scheduled inflows or outflows on Thursday and the next outflow of Rs31.1 billion is on Friday.

Published in The Express Tribune, August 6^th, 2010.