The State Bank''s forex reserves posted a healthy increase of over $500 million this week supported by foreign inflows. Pakistan''s liquid foreign exchange reserves were weakening for last few months mainly due to rising foreign debt payment and slow inflows. However, with the federal government''s serious efforts some improvement has been witnessed on the forex reserves side.
The reserves position strengthened during last week as the country received several inflows from multilateral institutions. According to weekly forex report released by the central bank, reserves held by the State Bank surged by some $505 million during the week ending December 13, 2013. The SBP''s liquid forex reserves reached $3.468 million end of last week compared to $2.963 million previous week.
The increase in the central bank reserves has been mainly attributed to $430 million inflows from multilateral and bilateral sources. These inflows included $144 million from Department for International Development (DFID), $137 million from Islamic Development Bank (IDB) and $149 million accounted for receipts from other multilateral institutions.
On account of external debt servicing and other official payments, the SBP made payments of $100 million from its reserves during the week under review. More inflows, including disbursement of the second tranche of the Extended Fund Facility of around $550 million, are expected in coming days that would further augment the foreign exchange reserves of the country.
Overall, the country''s liquid forex reserves rose by $466 million during last week. With current increase, the country''s reserves surged to $8.526 billion as on December 13, 2013 compared to $8.06 billion as on December 6, 2013. During the period, reserves held by banks posted a slight decline of $39 million to $5.058 billion.
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