Finance minister Ishaq Dar told reporters here on Sunday that his government was contemplating various measures like devaluation to minimise effect of sanctions on the economy following Pakistan's nuclear tests last May.

Apart from a mild downward adjustment of the rupee, the government is also considering introduction of a dual exchange rate system to discourage non-essential imports while boosting exports, he told a news conference.

Dar had announced a 50 per cent reduction in the cash requirement stipulation limit for opening letters of credit by importers. The move, which took effect on Monday, would require only a 20 per cent cash limit for all types of imports.

Hoping that the move would boost economic activities, Dar emphasised that Pakistan's worst crisis was over saying that the reduction ofcash margin was evidence of the improvements in foreign exchange reserves which stood at Rs 1,646 million on January 23.

"We have come a long way. The reserves by October last were $440 million," he said.

Presenting the six months review for the first half of the current fiscal July-December 1998 at a press conference on Sunday, Dar said that the first half of the current fiscal has been a challenging period for the country's economy in which government failed to meet the revenue target by Rs 7.9 billion.