Foreign exchange reserves rise to $16.42 billion

KARACHI: Foreign exchange reserves rose to $16.42 billion during the week ended on December 25, up from $16.39 billion the preceding week, according to the State Bank of Pakistan (SBP).

Reserves held by the central bank rose to $12.71 billion from $12.63 billion, while those held by commercial banks fell to $3.71 billion from $3.76 billion, said SBP spokesperson Syed Wasimuddin.

The government recently received more than $633 million from the United States for providing military and logistical support to fight militancy. “The $633 million received from the US will be included in the forex reserve data next week,” said Wasimuddin.

The reserves hit a record high of $17.1 billion in the week ended October 15 because of an increase in remittances from overseas Pakistanis and a narrowing trade deficit.

Earlier, the reserves received a boost in September after the International Monetary Fund sent $450 million and said that the money would go towards the budget to help with additional spending for flood relief and immediate foreign exchange needs.

In the currency market, the rupee ended at 85.67/73 to the dollar, firmer than Wednesday’s close of 85.81/88. “There were fresh dollar inflows in the market today (Thursday),” said a local bank dealer.

In the money market, overnight rates ended lower at 11.15 per cent, compared with the previous day’s close of 12.75 per cent, amid increased liquidity in the market as there was scheduled net inflows of around Rs11 billion ($128.4 million).

Published in The Express Tribune, December 31^st, 2010.