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Foreign exchange reserves improved by $3bn last year


ISLAMABAD: Pakistan’s foreign exchange reserves improved by US$ 3 billion since July 2013 and remained around $13.6 billion as on May 21, 2014 thus showing an improvement of over 28 percent. 
Of the overall increase in reserves, SBP reserves increased by $3.2 billion, while that of the scheduled banks decreased by 0.2 billion, according to Economic Survey of Pakistan 2013-14 here Monday. 
This improvement in reserve position was due to inflows from the IMF under the current programme, coalition support fund (CSF), 3G and 4G licenses, Issuance of Sovereign Bond, multilateral/ bilateral institutions and inflows from friendly countries, the survey revealed. 
Meanwhile, current account deficit gradually further widened during current financial year (July-April) to $ 2,162 million (0.9 percent of GDP) from $1,574 million during July-April, FY13 (0.7 percent of GDP). 
A striking feature of this year’s current account deficit is that it has widened even though the import growth has slowed to 1.2 percent only but the performance of exports has remained slow, resulting in widening of trade deficit, the Survey added. 
Unlike the current account, the capital and financial account improved and turned into surplus substantially amounting to $4,998 million during July-April, 2013-14 as compared to a deficit of $440 million in the corresponding period last year. 
Notwithstanding, higher surplus in the capital and financial account, the overall external balance of the country witnessed a surplus of $ 1,938 million during July-April 2013-14. 
This improvement in capital and financial account comes from realization of sovereign bond amount, grants from friendly countries and disbursements from multilateral and bilateral international financial institutions.
The survey, which was launched by finance minister said that like previous year’s performance, worker’s remittances registered commendable growth during July-April FY14, growing by 11.5 percent against 6.4 percent growth recorded in the corresponding period of last year. 
Foreign investment during July-April, FY14 increased by 133.3 percent compared to same period last year on account of foreign public investment in debt securities comprising special US dollar bonds Euro bonds, FEBC, DBC, T-bills and PIBs.
However, it said, foreign private investment witnessed a decline of 15 percent mainly emanating from foreign direct investment (FDI) which reduced by 12.9 percent. 
Inflows of FDI were $1604 million during first ten months of current financial year.
Regarding Exchange Rates, the survey added “as pressures on SBP reserves mitigated, Pak Rupee recorded an appreciation of 1.1 percent in Jul-Mar FY14, compared to 3.8 percent depreciation in the same period last year.” 
As a result, the exchange rate by end June FY14 is worked out Rs 98.77 against Rs 99.66 per dollar at end-June 2013.

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