KARACHI - After a gap of 34 months the foreign exchange reserves of Pakistan with the central bank have breached the barrier of $10 billion and declined to 9.926 billion dollars. Details gathered by The Nation showed that in 2003-04 for the first time the foreign exchange reserves of the country with the SBP settled at 10.553 billion dollars. From 2005-06 to October 2007, the reserves with the central bank rose to the highest level of 14.243 billion dollars (in October 2007). But after hitting this historical benchmark the reserves with the central bank continued to decline and finally by May 3, 2008, the SBP's reserves dipped below $10 billion and settled at 9.926 billion dollars. Overall the national reserves of the foreign exchange have dropped to 12.255 billion dollars by May 3, 2008, showing a decline of 4.205 billion dollars when compared with 16.46 billion dollars total reserves in October 2007. The forex reserves with the domestic banks amount to 2.255 billion dollars by May 3, 2008, as against 2.242 billion dollars in October 2007, showing a slight improvement. Capital market sources claimed that the current account deficit, triggered by the trade deficit, depreciation of rupee against the US dollar and flight of capital in the shape of investment in Dubai had led to rapid erosion in the foreign exchange reserves of the country. The reserves have squeezed swiftly and consistently although the inflow of remittances, foreign direct investment and external loans have improved during the current financial year. In nine months of the current fiscal Pakistan is believed to have suffered more than 9.60 billion dollars current account deficit as against a total of 6.878 billion dollars such deficit in FY07 and 4.99 billion dollars deficit in FY06. The trade deficit from July-March had enlarged beyond 14 billion dollars and it is expected to hit 19-20 billion dollars historic mark by June 2008. The high international oil prices (fuel/edible oil) and sharp increase in the imports of different groups have consumed a big chunk of additional amount of foreign exchange, causing extra burden on the national reserves. For example, the imports have increased to 24.141 billion dollars during July-February FY08 while exports amounted to only 11.707 billion dollars during this period. Sources said the previous government could neither float international bonds nor off-load the global depository shares in the global markets due to political anarchy in the country as a result the current account deficit has triggered to a record high level, eroding a big amount of foreign exchange reserves. They further said the newly-appointed government may not be able to raise foreign exchange from the international markets in the shape of bonds and GDSs by June this year and this exercise might be undertaken after the announcement of the new budget.