Forex reserves rise to $13.72bn

Friday, December 25, 2009
KARACHI: Pakistan’s foreign exchange reserves rose to $13.72 billion in the week that ended on Dec 19 from $13.54 billion the previous week, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan rose to $10.04 billion from $9.88 billion a week earlier, while those held by commercial banks edged up to $3.68 billion from $3.66 billion the previous week, the central bank said in a statement.

“One of the reasons that the central bank’s reserves rose is because it stopped providing foreign currency for imports of crude oil,” said Syed Wasimuddin, chief spokesman for the State Bank of Pakistan.

Commercial banks were made to provide foreign currency for imports of crude oil from Dec 14 under a central bank ruling.

As part of Pakistan’s commitments under the IMF programme, the central bank has stopped providing foreign currency for imports for crude oil.

The State Bank of Pakistan stopped providing foreign exchange for furnace oil in February, and for diesel and other refined products in August.

Foreign reserves hit a record high of $16.5 billion in October 2007 but fell steadily to $6.6 billion by November last year, largely because of a soaring import bill.

An International Monetary Fund (IMF) emergency loan package of $7.6 billion agreed in November last year helped avert a balance of payments crisis and shore up reserves.

The IMF increased the loan to $11.3 billion in July and approved a fourth tranche, worth $1.2 billion, of the standby arrangement on Wednesday. Pakistan would receive $1.2 billion on Dec 28, a central bank spokesman said.