Fresh Foreign Currency Deposits Reach $3 Billion

At the end of November 2004, all local and foreign banks working in Pakistan had $3 billion fresh foreign currency deposits i.e. those generated afresh after the freezing of $11 billion deposits in May 1998 when the country had gone nuclear. Data released by the State Bank show that the stock of fresh foreign currency deposits rose to $3.009 billion at the end of November from $2.671 billion at the end of June, depicting an increase of $338 million or 12.6 per cent in the first five months of this fiscal year.

This pace of increase in foreign currency deposits is much faster than seen in the last fiscal year, when these deposits had grown by $375 million or 16.3 per cent during the entire year. The rupee had depreciated by 3.7 per cent during the last fiscal year whereas it lost 2.8 per cent value in the first five months of this fiscal year. With the rupee having been on a gradual recovery path since November 1, growth in foreign currency deposits should decelerate provided the market is convinced that the recovery would continue…