Foreign exchange reserves held by the State Bank of Pakistan (SBP) remained almost flat during the week ending on August 1, according to data released by the State Bank of Pakistan (SBP) on Tuesday.
The central bank’s foreign exchange reserves increased $1 million to $9,277 million compared to $9,276 million in the preceding week that ended on July 25.
Total liquid foreign reserves held by the country, including net foreign reserves held by banks other than the SBP, stood at $14,306.9 million while net foreign reserves held by banks amounted to $5,029.9 million on July25.
In the week ending on July 25, the SBP-held foreign exchange reserves had declined $123 million to $9,276 million after the central bank made payments of $70 million on account of external debt servicing and other official payments.
Pakistan’s foreign exchange reserves increased more than 50% in 2013-14, which earned the SBP accolades from the International Monetary Fund (IMF).
Although the SBP-held foreign exchange reserves increased dramatically in the last fiscal year, the IMF noted in its latest review under the Extended Arrangement that they remain at low levels and the central bank should continue its efforts until reserves ‘comfortably exceed’ three months of import cover.
“Greater willingness to accommodate downward exchange rate flexibility could play an important role in accelerated reserves accumulation while helping boost exports over time,” it stated in the third review of the loan programme.
Similarly, international ratings agency, Moody’s Investors Service, has also revised the outlook on Pakistan’s foreign currency government bond rating to ‘stable’ from ‘negative’.
Published in The Express Tribune, August 8th, 2014.
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