Forex reserves fall to $11.122bn

Pakistan’s foreign reserves fell $162 million to $11.122 billion in the week that ended on July 5, as heavy outgoings for oil payments cancelled out inflows from from foreign banks and friendly governments.
According to official data, the State Bank of Pakistan said its reserves fell $301 million to $8.324 billion, while those held by commercial banks rose $139 million to $2.798 billion from $2.659 billion.
Foreign exchange reserves hit an all-time high of $16.486 billion on Oct. 31, 2007, but have fallen since then because of rising oil payments and political uncertainty.
The State Bank in May increased its key discount rate to 12.0 percent from 10.5 percent, to counter accelerating inflation and widening fiscal and current account deficits. Analysts expect the State Bank to raise rates again in the coming weeks.
The rupee has depreciated 11.9 percent since the beginning of the year and dealers said the outlook remains bleak.

Copyright Reuters, 2008