China concedes to place USD 500 mn with SBP – Alfalah Securities Limited

Karachi, June 12, 2012 (PPI-OT): China has agreed to place USD 500 mn with the State Bank of Pakistan (SBP) to defuse pressure on current account and strengthen the foreign reserves which are depleting at a fast pace.

According to Alfalah Securities Limited, the decision was taken during a meeting with President Asif Ali Zardari in China. The decline in foreign exchange reserves has led to steep devaluation of Pak Rupee which is likely to stabilize with the injection of the said amount in the reserves. The country is facing tough challenges on the external front where the current account deficit continues to widen rising to USD 3.394 bn in 10MFY12 and Pakistan is due to pay IMF an installment of ~USD 110 mn on June 29, 2012 and ~USD 400 mn on August 24, 2012.

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