Unsustainable stability

THE system is wobbling again. Pressures are mounting and getting too comfortable with the current episode of economic stability could prove a costly mistake. Just consider a few data points from the recent past. Start with this: recently, the finance minister, as well as the State Bank governor have issued public assurances that the foreign exchange reserves of the country are comfortable and continuing to rise. And they’re not wrong in saying so, obviously. News reports have said the State Bank has purchased as much as $9 billion from the open market to build up its reserves. Despite an uptick in imports and this purchasing by the SBP, the value of the dollar has remained more or less steady, and its availability in the open market is also healthy. Rollovers of maturing liabilities from China and more recently the UAE have gone through without much difficulty.