Due to official data issued the forex reserves of the Pakistan decreased to new lows during this week that were not witnessed throughout the last 6 years. According to the numbers provided by the Central Bank of the country September 13 showed us the decrease of the totally liquid forex reserves to the point of $8.912 billion that was last reached only in the 2002-03 year. As for the forex reserves related to the State Bank of the Pakistan its reserves reached $5.524 billion. But the net foreign reserves related to other banks of the country increased up to $3.387 billion. Thus the forex reserves of the country still decreasing sharply because of imports growth, stagnation of the exports and outflow of the foreign investments from the domestic stock markets. Furthermore such decrease of the forex reserves made the central bank almost impossible to affect the market of the country somehow and provide any maintenance for the local currency. So the current situation made central bank to purchase dollars instead of selling them.
Great trading volumes and the deficit of the account all this contributed to increased demand for the USD. The last numbers reflected the amount of the currency account deficit increased up to $2.657 in July – August this year. The same happened to the trade deficit as well that has increased up to $2.657 billion in July-August 2008.
Another negative situation was caused by the outflow of the dollars from the stock markets of the country. Due to the numbers provided by the National Clearing Company of Pakistan the outflow volume reached the $131 million level in July-September 2008. According to the announcements made by the banks people of the country started to convert their money into dollars.
However in case we will consider the forex reserves data issued by the State Bank of Pakistan we will see the growth of the forex reserves with the banks of the country since the February except of the Central bank that has experienced only the fall of the forex reserves. The banks of the country showed the forex reserves growth up to $3.387 billion and the Central bank experienced the fall of the forex reserves to the point of $5.524 billion.