Forex reserves jump to $15.7 billion

Disbursement of awaited CSF funds improves liquidity.

Our Correspondent August 02, 2012

KARACHI: The country’s total liquid foreign exchange reserves have increased to $15.6925 billion, from $14.5745 billion held on July 27, 2012. The boost comes after news that the State Bank of Pakistan (SBP) received $1.118 billion from the United States under the Coalition Support Fund (CSF).

Pakistan’s total foreign reserves had stood at $14.5745 billion on July 27, 2012, according to the SBP. According to the break-up, foreign reserves held by SBP were $10.1393 billion, and net foreign reserves held by banks other than the SBP amounted to $4.4352 billion on July 27.

The CSF disbursement will ease pressure on the Pakistani rupee and help the country make payments to the tune of millions of dollars to the International Monetary Fund (IMF) later this year, analysts said.

Khurram Schehzad, analyst at Invest Capital Markets, said that although gains may be short-lived, the disbursement of $1.118 billion will help ease pressure on the rupee, which has been under pressure over the past weeks. “Although it is Pakistan’s own money, the timing of the disbursement has a lot of significance for the country,” Schehzad said.

Muzammil Aslam, managing director of Emerging Economics Research, said the disbursement has significance for Pakistan, because the country has to repay a significant amount to the IMF this year.

“Although this money will be helpful mainly in future IMF repayments, its disbursement will also discourage speculation in money market,” Aslam added.

“It seems as if the Pakistan-US relationship is coming back on track. This will also raise hopes about the releasing of funds under the Kerry Lugar Bill in the coming months,” he added.

The rupee lost more than 8% of its value against the dollar last year.

Published in The Express Tribune, August 3rd, 2012.

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