Pakistan forex reserves at record low of $2.48 bln in real terms

Islamabad, Oct 17 (UNI) Pakistan's foreign exchange reserves have touched a record low of 2.48 billion dollars in real terms, barely enough to cater to the needs of one and a half month imports.

''The country left with overall foreign reserves of 7.3 billion, of which the State Bank of Pakistan possesses 3.98 billion dollars and the commercial banks 3.32 billion dollars,'' local daily The News quoted a senior official at the Ministry of Finance as saying.

Out of 3.98 billion dollars, 1.5 billion dollars have been consumed in the wake of forward booking liabilities, leaving the central bank with only 2.48 billion dollars in real terms.

However, the State Bank of Pakistan in its press release issued yesterday night said the country had 7.74 billion dollars reserves as of October 11, 2008.

This massive decline in foreign reserves, the official said, ''has led to an unprecedented depreciation of Pakistan's currency against the dollar. The dollar yesterday traded in the open market at Rs 87.'' ''Owing to this single factor, Pakistan's national debt has increased alarmingly by Rs 900 billion,'' the official added.

With no Saudi oil facility worth six billion dollars in sight and the postponement of the Friends of Pakistan meeting till next month, Pakistan is left with 2.48 billion dollars in real terms despite the recent inflow of 500 million dollars from the Asian Development Bank.

''It is even more shocking to know that in the last two and a half months, commercial banks' deposits have depleted by Rs 161 billion indicating that the people have withdrawn huge amounts from their deposits and purchased dollars, which has triggered massive demand for dollars.'' Pakistan's key economic managers are currently out of the country to attend the annual IMF meetings, held on October 12-14, and have not still returned.

Adviser to Prime Minister on Finance, Secretary Finance and Governor State Bank of Pakistan are all out of the country.

He said that Saudi Arabia was yet to extend the oil facility, which was due in the first week of September. It is pertinent to mention that Saudi Arabia did not participate in the Friends of Pakistan meeting held in Washington.

Although, Finance Minister Naveed Qamar earlier claimed that the Saudi authorities were working on a package for Pakistan, it has not yet been announced.

Two installments of 136 million dollars each from the UAE-based Etisalat Company against the privatisation of the Pakistan Telecommunications Limited (PTCL) are now overdue and the government is impatiently awaiting the 272 million dollars payment.

However, so far there is no progress on this issue. The government has so far been unable to float the Workers Remittances Bonds worth 750 million dollars to provide the much-needed cushion to the worsening foreign reserves situation.

On the privatisation front, there seems no tangible progress.

However, the government claims that some privatisation proceeds amounting to 1.86 billion dollars are in the pipeline.

The government had earlier claimed that it will have the inflow of 250 to 300 million dollars as Pakistan Telecommunication Authority (PTA) is going to issue licences to various companies in the first quarter of the current fiscal. So far no progress has been seen on this count.

UNI XC MP HT1335