Pakistan’s forex reserves rise to $12.27 bln

KARACHI, July 9 (Reuters) – Pakistan’s foreign exchange reserves rose by $430 million to $12.27 billion in the week that ended on July 4, a central bank spokesman said on Thursday.

The State Bank of Pakistan’s reserves edged up to $8.96 billion from $8.55 billion a week earlier, while reserves held by commercial banks jumped to $3.31 billion from the previous week’s $3.29 billion, chief spokesman Syed Wasimuddin said.

He said reserves rose sharply after the central bank received $500 million from the Asian Development Bank on June 30, which were shown in the current data.

Foreign reserves hit a record high of $16.5 billion in October 2007 but fell steadily to $6.6 billion by November last year, largely because of a soaring import bill.

Pakistan agreed in November to an International Monetary Fund emergency loan package of $7.6 billion to avert a balance of payments crisis and shore up reserves.

Pakistani officials are currently meeting the IMF in the Turkish city of Istanbul to discuss the country’s performance under the programme, and aiming to secure the roughly $875 million third tranche of the loan.

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Nigeria to lift forex controls from Monday – c.bank

ABUJA, July 9 (Reuters) – Nigeria’s central bank said on Thursday it would lift foreign exchange controls for local buyers of U.S. dollars from Monday, following a decision by governor Lamido Sanusi earlier this week.

The bank imposed forex restrictions in January and replaced the Wholesale Dutch Auction System (WDAS) to try and stem a sharp decline in the naira currency.
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‘The Central Bank of Nigeria hereby re-introduces the Wholesale Dutch Auction System with effect from Monday,’ said Batari Musa, director at the bank’s trade and exchange department.

‘This is in a bid to stimulate activities in the interbank and stabilize the foreign exchange market.’

The central bank initially announced the lifting of forex controls on Tuesday after its first monetary policy meeting under Sanusi.

At the meeting, the central bank also slashed interest rates by 2 percentage points and guaranteed interbank transacations for the next nine months.

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Russia calls for revision of SDR currency basket

By Gleb Bryanski

YEKATERINBURG, Russia (Reuters) – The International Monetary Fund (IMF) should expand the basket of Special Drawing Rights to include the Chinese yuan, commodity currencies and gold, a senior Kremlin official said on Tuesday.

The SDR is an international reserve asset allocated to member countries with its exchange rate determined by a basket of currencies, at the moment including dollar, euro, yen and sterling. A review of the basket is due in November 2010.

“The rouble, yuan deserve to be included in the SDR basket,” Kremlin economy aide Arkady Dvorkovich told a news conference ahead of the first summit of Brazil, Russia, India and China, known as BRIC, in the Russian city of Yekaterinburg.

“It is important that the composition of the basket also reflects the role of commodities in the global economy,” Dvorkovich said, naming Australian and Canadian dollars as possible candidates.

“We also think that gold has a potential as a possible participant. The price of gold has a negative correlation to the dollar. Therefore it is beneficial to tie these two instruments into one so that investors feel safer,” he said.

Dvorkovich said he doubted Russia would complete its transition to an inflation-targeting regime which implies a freely floating exchange rate for the rouble next year when the IMF basket’s review takes place, as announced by the central bank.

Dvorkovich said BRIC leaders will discuss new reserve currencies at the summit but called for caution in the currency debate, saying it was in no-one’s interest to ruin the dollar.

Russia rattled financial markets last week when a central bank official said Moscow will cut the share of U.S. Treasuries in its forex reserves in favour of IMF bonds and bank deposits.

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