KARACHI, April 27: The foreign exchange reserves of the country slightly increased during the last week but the SBP saw a substantial outflow in its forex holdings. The high demand of the greenback resulted in a jump in the rates of forward market.

The SBP’s reserves declined by $62 million during the week but the bankers said that massive buying was noted by two big banks on behalf of the State Bank.

“This massive buying increased the dollar demand and the forward rates touched as high as Rs1.09 for six months,” said currency dealers in the inter-bank market.

The currency traded at Rs60.07-08 on spot but the dealers said that the shortage was created by the SBP which vigorously bought dollars to maintain its reserves level.

According to the data released by the SBP on Thursday, the total reserves of the country added $4 million to reach at $12.910 billion on April 22.

The SBP, which had reserves of $10.611 billion a week ago, recorded a decline of $62 million. However, the commercial banks increased their reserves by $66 million in the same period.

The SBP has been facing tough situation due to rising trade deficit which might end up with a gap of $10 billion by the end of the current fiscal. The wide gap has already reached over $6bn.

Currency dealers said that demand from importers was too high and the rates might see another increase on Friday.

They said that the high petroleum bills had produced enormous pressure on the SBP which was struggling to maintain a reasonable level of forex reserves.