KARACHI - The foreign exchange reserves of Pakistan have declined below 9 billion dollars, sending shock waves among the analysts and capital market stakeholders in the country. State Bank of Pakistan on Thursday reported reserves at 8.912 billion dollars by September 13, 2008. The reserves with SBP amount to 5.524 billion dollars while 3.387 billion dollars are with the domestic banks. In October last year the foreign exchange reserves had hit the highest mark of 16.40 billion dollars, but since then the reserves have steadily dropped, squeezing to 8.912 billion dollars by September 13, 2008. Analysts held a view that debt rating uncertainty indicated by Moody's Credit Rating Agency on country's falling exchange reserves was among the reasons for negative index. The woes of foreign reserves and sinking value of rupee further exacerbate troubles facing by investors and other parts of the economy. The stock market is likely to see heavy backward and forward movement as investors continue to assess the news poured in today about the dept rating uncertainty indicated by Moody's, analysts said. Analysts Hasnain Asghar Ali said that the reports stating the perception of the national economy by various international research houses at the moment facing default- explains their credibility continued to pollute the local investment scene. Analysts said that selling pressure continued at the stock market on the back of uncertainty looms in international capital markets over the bankruptcy filed by Lehman Brothers, rupee falls to record low against dollar and increased in concerns of investors over rising current account deficit, Law & Order situation in the country, rising risk profile of Pakistan Bonds placed in international markets. A report primed by the BMA Capital said that the fall in FX reserves, especially if combined with substantial capital flight could see Pakistan resort to borrowing from international agencies over the next two to three years. This can be done without the need for debt restructuring (Pakistan has approximately USD1.1bn in foreign debt repayments in the form of Eurobonds due over FY09-10). It is possible to borrow from such agencies to meet balance of payments requirements without going into default. Hence, while foreign debt obligations may increase over the next few years a complete outright default is less of likelihood, report added. While the brokers and investors commenting on the bleak economic scenario of the country said that "the government will have to take crucial measures to help alleviate the turmoil in the markets as well in the overall economy of the country".