Forex reserves dip to $10.83bn

ISLAMABAD: Pakistans foreign currency reserves fell further to $10.83 billion against $11.12 billion the previous week, the central bank said on Thursday.

Reserves fell below $11 billion mark on July 12 and reached $10.83 billion compared to $11.12 billion the previous week. If the situation does not improve on the external front, there will be a possibility of approaching the IMF again during the current fiscal year.

Foreign exchange reserves held by the central bank stood at $7.95 billion compared to $8.32 billion in the previous week. The foreign exchange deposits held by banks were $2.88 billion compared to $2.80 billion the previous week.

Foreign currency deposits held by banks are included in the calculation of the countrys total reserves, which have fallen from a record $16.39 billion in early November 2007. It shows that the foreign reserves were depleting rapidly and had dropped by over $6 billion in the last eight months.

ôThe reserves are depleting rapidly, ultimately putting pressure on Pak rupee,ö an official in the finance ministry told The News. The countrys reserves are decreasing owing to growing imports especially the surge in oil prices in the recent past, causing vulnerabilities on the external front of the national economy.

Official sources said that the rapid depletion of reserves was quite disturbing for the economic managers as on one side the external debt surged and touched $46 billion while on other side the precious reserves declined from $16 billion to just over $10 billion in recent weeks.

Pakistans foreign debt also swelled by $10.5 billion in the last six years and now stands at $45.9 billion at a time when the reserves are depleting more rapidly.

The foreign currency reserves stood at $14.08 billion on Feb 15, 2008. The reserves position was much better a few months back as they stood around $16.4 billion during Oct 2007. It showed that the reserves declined by around $6 billion in the last few months.