Swelling oil and food imports drain forex reserves - Pakistan Today

Swelling oil and food imports drain forex reserves

Pakistan’s dollar reserves have sustained a declining trend as the oil and food imports bill has climbed to $32 billion in the first 10 months of the current fiscal year. The foreign exchange reserves have undergone depletion in the last four consecutive weeks after ballooning to historic highs during initial weeks of last month (April). Healthy inflows of the greenback from exports and worker remittances had triggered the record figures. Data of the State Bank of Pakistan (SBP) showed that dollar reserves have dwindled cumulatively by $409 million or 2.35 percent to $16.966 billion in the last four consecutive weeks. Compared with the record level of $17.637 billion, the current foreign exchange reserves have reduced by 3.8 percent or $670.4 million. The last raise had come a month earlier, when the foreign exchange reserves had jumped by $58.8 million or 0.33 percent to $17.376 billion.The State Bank of Pakistan, on Thursday, reported that, during the recent week, total liquid foreign reserves squeezed to $16.966 billion from $17.008 billion of last week.Meanwhile, foreign exchange reserves held by central and commercial banks dwindled during the week. Reserves, held by the State Bank, stood at $13.56 billion, down $33.8 million, when compared with $13.59 billion in the last week, while reserves with commercial banks also contracted by $8.5 million to $3.410 billion against $3.42 billion in the preceding week.From the very outset, some economic observers have been uncertain and, thereby, cautious about the sustainability of an upward trend in the flow of dollar into the terrorism-hit country. They had maintained that soaring foreign exchange reserves as a result of exports and remittances were temporary. Most analysts attributed healthy exports and home remittances, respectively, to the international price hike in Pakistan’s major exportable commodities like cotton and rice.  Data revealed by the Federal Bureau of Statistics (FBS) showed that the funds-starved country would have to pay over $32 billion for oil and food products imported during July-April FY11. Oil and food imports’ bill in the corresponding months of FY10 had aggregated to a massive $24 billion.The inflated bill must have raised eyebrows of the apparently jubilant economic managers, who would have eyed around $8.0 billion of extra drain out from reserves on account of imports. The ongoing downward trend is also going to undermine government’s claims that the country would achieve the foreign exchange reserves’ target of over $20 billion by the end of this financial year.

ISMAIL DILAWAR

Pakistan’s dollar reserves have sustained a declining trend as the oil and food imports bill has climbed to $32 billion in the first 10 months of the current fiscal year. The foreign exchange reserves have undergone depletion in the last four consecutive weeks after ballooning to historic highs during initial weeks of last month (April). Healthy inflows of the greenback from exports and worker remittances had triggered the record figures. Data of the State Bank of Pakistan (SBP) showed that dollar reserves have dwindled cumulatively by $409 million or 2.35 percent to $16.966 billion in the last four consecutive weeks. Compared with the record level of $17.637 billion, the current foreign exchange reserves have reduced by 3.8 percent or $670.4 million. The last raise had come a month earlier, when the foreign exchange reserves had jumped by $58.8 million or 0.33 percent to $17.376 billion.The State Bank of Pakistan, on Thursday, reported that, during the recent week, total liquid foreign reserves squeezed to $16.966 billion from $17.008 billion of last week.Meanwhile, foreign exchange reserves held by central and commercial banks dwindled during the week. Reserves, held by the State Bank, stood at $13.56 billion, down $33.8 million, when compared with $13.59 billion in the last week, while reserves with commercial banks also contracted by $8.5 million to $3.410 billion against $3.42 billion in the preceding week.From the very outset, some economic observers have been uncertain and, thereby, cautious about the sustainability of an upward trend in the flow of dollar into the terrorism-hit country. They had maintained that soaring foreign exchange reserves as a result of exports and remittances were temporary. Most analysts attributed healthy exports and home remittances, respectively, to the international price hike in Pakistan’s major exportable commodities like cotton and rice.  Data revealed by the Federal Bureau of Statistics (FBS) showed that the funds-starved country would have to pay over $32 billion for oil and food products imported during July-April FY11. Oil and food imports’ bill in the corresponding months of FY10 had aggregated to a massive $24 billion.The inflated bill must have raised eyebrows of the apparently jubilant economic managers, who would have eyed around $8.0 billion of extra drain out from reserves on account of imports. The ongoing downward trend is also going to undermine government’s claims that the country would achieve the foreign exchange reserves’ target of over $20 billion by the end of this financial year.



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