Pakistan's foreign reserves fell $241 million to $10.487 billion in the week that ended on July 26 due to outgoings for import payments, the central bank said on Thursday. According to official data, the State Bank of Pakistan said its reserves fell $330 million to $7.448 billion, while those held by commercial banks rose $89 million to $3.039 billion from $2.95 billion. Total reserves are now down to the equivalent of less than three months of imports, raising the prospect of a balance of payments crisis unless large multilateral loans arrive soon. The government said it has obtained Saudia Arabia's agreement to defer oil import payments for the 2008-09 fiscal year (July-June) and an announcement would be made soon by Saudi Arabia. Pakistan's foreign exchange reserves hit an all-time high of $16.486 billion on Oct. 31, 2007, but have fallen since then because of rising oil payments and foreign investor's pulling money out because of political uncertainty dogging the country 4 months after a civilian coalition formed a new government. The central bank on Tuesday tightened the monetary policy by raising the discount rate to 13 percent from 12 percent to counter accelerating inflation and widening fiscal and current account deficits. It also took steps to help stabilize the rupee earlier this month. The main measure was a temporary suspension of forward booking of foreign currency for all imports. An assurance was also given that the central bank would provide foreign exchange to authorized dealers for all imports of furnace oil used for power plants. The rupee has lost 16 percent against the dollar since the beginning of the year and dealers said the outlook for the medium-term was still uncertain.
