Karachi, Pakistan (BBN)– Pakistan’s foreign exchange (forex) reserves have been declining due to external debt servicing and no fresh inflow during the last two months.
The State Bank of Pakistan (SBP) reported on Friday that reserves held by the bank declined by US$89 million to $9.188 billion during the week ended on August 8 as against $ 9.277 billion in the previous week.
Total reserves of the country stood at $14.264 billion. Net foreign reserves held by the banks stood at $5.076 billion.
The SBP reserves are expected to fall further as the bank paid about $147m to the International Monetary Fund (IMF) this week, the Dawn reported.
If no inflow is received by the SBP this week, reserves may fall below $9 billion that may add volatility to the currency market which is already feeling the heat of political uncertainty.
During the week ending on Wednesday, the dollar rose to four-month high and crossed Rs100.
“The dollar remained around Rs100 in the inter-bank market on Friday,” Atif Ahmed, a currency dealer, was quoted by the Dawn as saying.
He said there is another repayment to donors next week for which the State Bank has been buying dollars from banks.
State Bank’s Acting Governor Saeed Ahmed said on Thursday that banks have been directed to ensure smooth supply of dollars in the market. He said the dollar got higher prices due to supply and demand gap. He said there was a need to curb speculators.
Despite hefty payments for oil imports, reserves of scheduled banks remained intact. This week around $100m was paid for oil payments.
Currency dealers in the inter-bank market said the dollar may see a decline by mid of next week as they believe that after opening of New York on Tuesday, higher inflows are expected.
Pakistan is negotiating another instalment of loan with the IMF in Dubai which may be granted next month.
BBN/SSR/AD-16Aug14-8:40 pm (BST)
