KARACHI: Pakistan has received $371 million as Coalition Support Fund which is the first dollar inflow in the new fiscal year.
A spokesman for the State Bank confirmed on Thursday that the bank has received the fund which would help improve the declining foreign exchange reserves of the country.
The dollar holdings of the State Bank have been declining since the first week of the month, and the bank lost $723m during 22 days to stay around $8.554 billion on Aug 22.
The falling reserves, with political uncertainty, hit the exchange rate which weakened the local currency, and within 10 days rupee lost 4 per cent against the US dollar. Since Monday, the currency market witnessed massive fluctuation as it fell below Rs101, but again moved over Rs102 per dollar. On Thursday, the dollar remained almost stable hovering around Rs102.15 to 102.30.
Currency dealers said the State Bank’s efforts brought the dollar down at Rs101, but high demand and lesser supply pushed the dollar prices.
“The bullish market sentiment has neutralised the State Bank’s intervention in the inter-bank market and it seems that Friday could see another hike in the dollar rate,” said Atif Ahmed, a currency dealer in inter-bank market.
“The inflows to CSF fund may temporarily improve the sentiment, but deepening political uncertainty is more dominating for the depressed exchange market,” he said.
Banking sources said that the next month could be more crucial for the dollar-rupee parity as the country would have to pay some large payments to IMF.
Since the beginning of long march and sit-in at Islamabad, exporters have stopped bringing their proceeds in to the market and they may hold the proceeds for another month.
Bankers said there is a need to pursue them to bring the export proceeds with immediate effect that could stabilise the exchange rate.