KARACHI (October 25 2002) : Pakistan's foreign currency reserves rose $169 million to a record $8.445 billion in the week ended Oct. 17, said State Bank of Pakistan, the central bank.
The country revised foreign currency reserves target last month to $10 billion for the year ending June 30, 2003 from earlier estimates of $7 billion. But after continuous flow from overseas Pakistanis and steady approval of loans from international financial institutions, the foreign currency reserves kept on rising and it appears that the target of $10 billion would be achieved comfortably during the current fiscal year.
Since the Sept. 11 terrorist attacks the central bank has tightened controls over the informal “hawala” network of money changers that the U.S says is used to channel money to terrorists.
Expatriates, who routinely send home money to families in Pakistan, are remitting more using banks for fear they may get embroiled in U.S.-led investigations into terrorist financing.
Remittances in three months to September 30 rose 210 percent to $1.052 billion as compared with $340 million of the same period a year ago.
Pakistan is also paying less debt after some of its $36 billion of overseas loans were rescheduled, and has won aid from the U.S. and other industrial nations by co-operating in the war on terrorism. That's helped to double reserves over the past year.
Since Sept. 11, the rupee has risen almost 12 percent in the informal kerb, or open market and almost 8 percent on the inter-bank market.
The State Bank's reserves rose to $6.091 billion from $6.006 billion last week while foreign currency deposits held by commercial banks rose to $2.354 billion from $2.279 billion of previous week.
