LAHORE: Pakistan’s foreign reserves fell by $44 million to $10.91 billion in the week that ended on June 14, said the central bank on Thursday.
Reserves held by the State Bank of Pakistan fell by $12 million to $8.267 billion, while those held by commercial banks rose to $2.643 billion from $2.567 billion.
Pakistan’s foreign exchange reserves hit an all-time high of $16.486 billion on October 31, 2007, but have fallen since then because of political uncertainty, beginning when President Pervez Musharraf imposed six weeks of emergency rule on Nov 3.
Foreign investors remained cautious after the assassination of former Prime Minister Benazir Bhutto on Dec 27.
The central bank last month increased its key discount rate to 12.0 per cent from 10.5 per cent, to counter accelerating inflation and widening fiscal and current account deficits.
Central Bank Governor Shamshad Akhtar said last month 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.
The rupee has depreciated 9.4 per cent since the beginning of the year but has recovered 3.2 per cent since it hit its lowest closing on May 20.
Source: The Post, 20/6/2008
It seems that if the mismanagement, political turmoil and Oil price hike continues in the coming months, the reserves will go back to 1999 position of 400 millions.
Pakistan Oil bill in 2000-2001 = $2.8 billions, 2004-2005 = $3.8 billions and 2006-2007 = $7 billions 2007-2008 July to April= $8.67 billions
The experts fear that the oil import bill could touch $22 billions figures in 2008-2009 which is really alarming situation.