Pakistan Foreign Exchange Reserves to stand at $16.69 billion

Pakistan Foreign Exchange Reserves to stand at $16.69 billion

Karachi (December 16), despite cautions from energy shortage marred industry and textile sectors of the country to experience decline in the exports, Pakistan’s foreign exchange reserves during the last week reached to $ 16.69
billion. In the previous week, the figure stood at $ 16.68 billion. The present increase in the reserves is being attributed to the increase in the foreign reserves maintained by the commercial banks in the country.

As far the reserves held the by State Bank of Pakistan are concerned, they fell to $ 12.81 billion, compared to $ 12.86 billion the previous week.  Reserves held by commercial banks rose to $3.88 billion, compared with $3.82 billion
from the previous week.

Foreign exchange reserves hit a record $18.31 billion in the week ending July 30, but have since eased due to debt repayments.

The reserves were boosted in June by inflows of $411million, including a $191.9 million loan from the World Bank, and a loan of $196.8 million from the Asian Development Bank.

Higher export proceeds and a record inflow of remittances have also helped support Pakistan’s foreign exchange reserves.

According to official data, remittances rose 18.33 percent to $5.24 billion in the first five months of the fiscal year (July-June), compared with $4.43 billion in the same period a year earlier.

Remittances fell to $923 million in November, compared with $926.89 million received in November last year.

Islamabad must start repaying an $8 billion International Monetary Fund loan in early 2012. Without additional sources of revenue, its foreign exchange reserves will come under further pressure, analysts say.

Under the present situation, when the country has also locked horns with the USA – on the basis of which it is fair to believe that there would be no loan from the World Bank or any other international financial institution, the
needed extra revenues are going to be financed through more taxes, not on the rich but the poor masses of the country.

While the political scenario has started depicting that both masses and the opposition parties have had enough of the ruling lot, if the government chooses to raise the required funds through publishing more money, as it has always
been doing, or through increasing tariff on gas or electricity, it will only accelerate the pace by which a political chaos is being created in the country.

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Posted by Fayyaz Yaseen on Dec 16 2011. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry