Forex reserves flat at $11.284bn

Foreign reserves fell marginally by $2 million to $11.284 billion in the week that ended on June 28, as heavy outgoings on oil payments cancelled out inflows from foreign banks and friendly governments.
Releasing the data late on Thursday, the State Bank of Pakistan said its own reserves fell $31 million to $8.625 billion, while those held by commercial banks rose $29 million to $2.659 billion from $2.630 billion.
Analysts said the previous week’s and this week’s reserves reflected inflows of $667 million from MCB Bank’s 15 percent acquisition by Malayan Banking Bhd, $374 million from in US support, $100 million from Barclays Bank Plc, and $500 million from a Chinese loan to help the country meet its balance of payment needs.
However pressure from oil imports payments left little room for foreign reserves to show a positive net inflow.
Pakistan’s foreign exchange reserves hit an all-time high of $16.486 billion on Oct. 31, 2007, but have fallen since then because of political uncertainty.
The State Bank of Pakistan 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.
State Bank of Pakistan Governor Shamshad Akhtar said in May foreign inflows of up to $3.5 billion were expected in the short- to medium-term, most of it in the form of loans from multilateral lenders and friendly governments.
These measures stabilised the rupee in the short-term but on Thursday is hit a record low of 69.8088.
The rupee has depreciated 13.3 percent since the beginning of the year and dealers said outlook remains bleak.

Copyright Reuters, 2008