Pakistan's forex reserves hit all-time high of $18.25 billion

[Jungibaaz]

Pakistan's forex reserves totaled $17.47 b in previous week $17.95 b during week ending March 26.

KARACHI: Pakistan’s foreign exchange reserves reached an all-time high of $18.25 billion in the week ending July 2, following inflows of more than $400 million that included loans from multilateral donors, a central bank official said on Thursday.

Reserves held by the State Bank of Pakistan (SBP) rose to $14.79 billion from $14.02 billion a week ago, and those held by commercial banks edged to $3.46 billion up from $3.45 billion, said SBP chief spokesman Syed Wasimuddin.

“During the week we received inflows of $411 million, which pushed the reserves to an all-time high level,” he said.

“These inflows included a loan of $191.9 million from the World Bank, and another loan of $196.8 million from the Asian Development Bank.”
Pakistan’s foreign exchange reserves totaled $17.47 billion in the previous week, reaching a previous high of $17.95 billion during the week ending March 26.

Higher export proceeds and a record inflow of remittances have helped Pakistan’s forex reserves grow steadily.

Remittances from overseas Pakistanis topped $10 billion for the first time during the 2010/11 fiscal year, hitting $10.1 billion in the first 11 months, an increase of 25.20 percent compared with the same period last year, according to data from the SBP.

Foreign exchange reserves were boosted in January by more than $633 million when the United States provided funds for military and logistical support for Pakistan’s campaign against a Taliban insurgency.

In May 2010, Pakistan received $1.13 billion in the fifth tranche of an $11 billion International Monetary Fund (IMF) bailout programme.

Pakistan’s forex reserves hit all-time high of $18.25 b – The Express Tribune

 

[kawaraj]

very good, this is the blood that can pump up Pakistan's economy.

overseas remittance can be higher if our government can facilitate overseas jobs recruiting such as hiring agencies, or provide proper training.

I heard the Philippines overseas workers remmit 30 billion $ a year, could learn some practice from them.

 

[IceCold]

Remittance is one factor, which should not be the building block of our economy. World over the economy relies majorly on exports and less on remittance. In our case its the opposite.

 

[zombieland]

Thats correct... even more than the Chinese concept of export driven economy, I believe internal consumption based economy is far better. We have the requisite man force to do that. Only the basic institutions such as education, higher living standards and proper health care would need to be improved on a large scale. Consumption would automatically pick up as living standard improves, which should bring back our economy from the disaster we are looking at now.

Remittance is one factor, which should not be the building block of our economy. World over the economy relies majorly on exports and less on remittance. In our case its the opposite.

 

[foxbat]

Remittance is one factor, which should not be the building block of our economy. World over the economy relies majorly on exports and less on remittance. In our case its the opposite.

You are right. Also remittances for this year have been bolstered by the donations by overseas Pakistani and foreign nationals to aid the flood relief of last year. Wont be a sustainable phenomenon..

 

[Vibs]

Thats correct... even more than the Chinese concept of export driven economy, I believe internal consumption based economy is far better. We have the requisite man force to do that. Only the basic institutions such as education, higher living standards and proper health care would need to be improved on a large scale. Consumption would automatically pick up as living standard improves, which should bring back our economy from the disaster we are looking at now.

High forex reserves are good but this is a pretty risky scenario. NATO did the same to countries like Zimbabwe. Hiked up their forex reserves through IMF and World Bank loans and manipulated them to eradicate local subsidies. Then one fine day pulled out of bailouts and dropped the credit ratings showing loan defaults and left the economies of these counties reeling.

 

[lepziboy]

in terms of remittance the information provided by world bank is that philippines remittance for 2010 is 20 billion India is the highest 55 biliion

 

[SMC]

High forex reserves are good but this is a pretty risky scenario. NATO did the same to countries like Zimbabwe. Hiked up their forex reserves through IMF and World Bank loans and manipulated them to eradicate local subsidies. Then one fine day pulled out of bailouts and dropped the credit ratings showing loan defaults and left the economies of these counties reeling.

IMF loans make up only a small fraction of these reserves. Most of the loan was meant for other purposes, such as paying previous debt.

 

[Vibs]

IMF loans make up only a small fraction of these reserves. Most of the loan was meant for other purposes, such as paying previous debt.

Dude,IMF is giving you a total of $11 bn over 5 tranches to help pay off debt. This does not come free. As of now, Pakistan is not a major exporter so inflow of forex is limited to remittances. Imagine a situation where the bailouts stop and the reserves get strained. Non-Residents do not send home remittances under such situations as they are afraid of the devaluation of the home currency.That's what happened to Zimbabwe. They had to print million dollar notes!!!
Almost the same thing happened to India in the early 90's when India had to sell off it's gold. Pakistan has very few of those options. You guys need to go the Taiwan way fast!!!!

 

[SMC]

I was talking about the claims of loans making up forex reserves.

 

[Vibs]

I was talking about the claims of loans making up forex reserves.

Guess we misunderstood each other's posts. I agree loans don't make up all your forex reserves, but an IMF bailout to payoff loans is still a little risky don't you think. After all IMF is run by Europeans and World Bank by the US. They even tried to make Bono of U2 World Bank President once!!

 

[Mo12]

in terms of remittance the information provided by world bank is that philippines remittance for 2010 is 20 billion India is the highest 55 biliion

Yes, but this is still great news for them, they shouldnt compare themselves to India or USA, just be themselfs.

 

[foxbat]

I was talking about the claims of loans making up forex reserves.

And thats true actually

"When you say record-high forex reserves, you have to be realistic as well, as out of the reserves nearly $8 billion is the amount we have borrowed from IMF (International Monetary Fund) and then there are other foreign loans, so we can say around 55 percent of the reserves are Pakistan's, the rest is on loans," said Khalid Iqbal Siddiqui, director at Invest and Finance Securities Ltd.@

Forex reserves sustainability a cause for concern | Business | DAWN.COM

 

[khurasaan1]

Pakistan's forex reserves totaled $17.47 b in previous week $17.95 b during week ending March 26.

KARACHI: Pakistan’s foreign exchange reserves reached an all-time high of $18.25 billion in the week ending July 2, following inflows of more than $400 million that included loans from multilateral donors, a central bank official said on Thursday.

Reserves held by the State Bank of Pakistan (SBP) rose to $14.79 billion from $14.02 billion a week ago, and those held by commercial banks edged to $3.46 billion up from $3.45 billion, said SBP chief spokesman Syed Wasimuddin.

“During the week we received inflows of $411 million, which pushed the reserves to an all-time high level,” he said.

“These inflows included a loan of $191.9 million from the World Bank, and another loan of $196.8 million from the Asian Development Bank.”
Pakistan’s foreign exchange reserves totaled $17.47 billion in the previous week, reaching a previous high of $17.95 billion during the week ending March 26.

Higher export proceeds and a record inflow of remittances have helped Pakistan’s forex reserves grow steadily.

Remittances from overseas Pakistanis topped $10 billion for the first time during the 2010/11 fiscal year, hitting $10.1 billion in the first 11 months, an increase of 25.20 percent compared with the same period last year, according to data from the SBP.

Foreign exchange reserves were boosted in January by more than $633 million when the United States provided funds for military and logistical support for Pakistan’s campaign against a Taliban insurgency.

In May 2010, Pakistan received $1.13 billion in the fifth tranche of an $11 billion International Monetary Fund (IMF) bailout programme.

Pakistan’s forex reserves hit all-time high of $18.25 b – The Express Tribune

The Forex reserves or $$$ is just piece of paper we need real money/assets in the form of Gold........

 

[SMC]

And thats true actually

"When you say record-high forex reserves, you have to be realistic as well, as out of the reserves nearly $8 billion is the amount we have borrowed from IMF (International Monetary Fund) and then there are other foreign loans, so we can say around 55 percent of the reserves are Pakistan's, the rest is on loans," said Khalid Iqbal Siddiqui, director at Invest and Finance Securities Ltd.@

Forex reserves sustainability a cause for concern | Business | DAWN.COM

But what he's discounting is the fact that loans do not go towards forex reserves.