KARACHI, Sept 16: The State Bank has decided to monitor more closely the use of fresh foreign currency deposits of the banks.

The central bank has asked all the banks dealing in foreign exchange to furnish monthly reports showing specific areas of utilization of foreign currency deposits.

The format on which the banks are supposed to submit this report requires them to show outstanding export financing; placement with the banks; balances with the SBP; balances in Nostro accounts and cash in hand. The banks utilizing foreign currency deposits in any other area are supposed to specify it.

The SBP has advised all the banks to submit this report by 7th of each month. The first report showing position of August 2002 should be furnished by September 18.

Senior bankers say the purpose for calling monthly reports on the use of foreign currency deposits is to enable the SBP to keep a close watch on it. They say that the breakup of the utilization will not only help the SBP keep a record of foreign currency lending to the exporters but will also enable it to screen major sources of outflow of foreign exchange. Besides it will also give the SBP a complete picture of the foreign currency deposits placed with it as cash and liquid reserves.

At present all banks combined have about $2.2 billion foreign currency deposits that is part of the $7.6 billion liquid foreign reserves of the country.