Foreign currency reserves decreases to $8bn: NA told

ISLAMABAD: The country’s foreign exchange reserves have decreased to $ 8 billion currently, Parliamentary Secretary for Finance Rana Muhammad Afzal Khan told National Assembly on Thursday.

Answering the question of Dr Azra Fazal Pechuho, he said country had foreign exchange reserves of $ US 9,900.90 million on September 30. The total external public debt of the country stood at US $ 48,500 million on September 30, 2013.

He said a number of steps are being taken to stabilize dollar-rupee parity ratio. Imports must be reduced for saving the foreign currency.

Pak Rupee has depreciated by 8.2 percent from June to November 2013. The depreciation is mainly a reflection of overall weak balance of payments is the result of a continuous decline in the net capital and financial flows since 2007.

In FY 2013, he said there has been net marginal inflow of US$0.6 billion only against US$ 1.5 billion in FY 2012. Thus despite some improvements in external current account and continued growth in remittances – a deficit of US$ 2.4 billion in the overall balance of payment was recorded in FY 2013.

The repayment of IMF loans in FY 2013 has kept the country?s foreign exchange reserves and the exchange rate under pressure. In addition non realization of budget privatization inflows in FY 2013 also added to these pressure. In July-Sep FY 14 the external current account (CAD) recorded a deficit of US $ 1.2 billion mainly due to increase in import payments.

Despite growth in worker remittances net outflow under the head of services (US$ 07 billion compared to inflow of US $ 0.1 billion in the same period last year enlarged CAD.

He said the Capital and financial account have also observed a marginal deficit of US$ 16 million. Overall balance of payments deficit of US$ 1.1 billion has resulted in a fall in State Bank of Pakistan (SBP?s) foreign exchange reserves and the depreciation of rupee against US $. Non realization of official foreign exchange inflows including 3G license fee.

PTCL privatization proceeds and loans from multilateral and bilateral sources including IMF, World Bank and ADB also add to the situation.