KARACHI: Foreign exchange reserves of the State Bank of Pakistan declined due to external debt servicing and no fresh inflow over the past two months.
According to a State Bank report, the reserves held by the bank declined by $89 million to $9.188 billion during the week ended on Aug 8 as against $ 9.277bn in the previous week. Total reserves of the country stood at $14.264bn. Net foreign reserves held by banks stood at $5.076bn.
The SBP reserves are expected to fall further as the bank paid about $147m to the International Monetary Fund (IMF) this week.
If no inflow is received by the Central Bank this week, reserves may fall below $9bn that may add volatility to the currency market which is already feeling the heat of political uncertainty.
During the week ended on Wednesday, the dollar rose to four-month high and crossed Rs100.
It is to be noted that there is another repayment to donors next week for which the SBP has been buying dollars from banks.
Meanwhile, SBP Acting Governor Saeed Ahmed said that banks had been directed to ensure smooth supply of dollars in the market. He said the dollar got higher prices due to supply and demand gap. He said there was a need to curb speculators.
Despite hefty payments for oil imports, reserves of scheduled banks remained intact. This week around $100m was paid for oil payments.
Currency dealers in the inter-bank market said the dollar may see a decline by mid of next week as they believe that after opening of New York on Tuesday, higher inflows are expected.
Pakistan is negotiating another instalment of the loan with the IMF in Dubai which may be granted next month.
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