Foreign exchange: SBP's reserves plunge 3.26% to $10.8b

Statement cites no reason for the alarming decrease

KARACHI: Foreign exchange reserves held by the State Bank of Pakistan (SBP) again came under pressure, falling 3.26% on a weekly basis, according to data released by the central bank on Thursday.

The fall sparks concern over Pakistan's ability to meet future payment obligations and manage a bulging current account deficit.

On May 11, foreign currency reserves held by the central bank were recorded at $10,798.9 million, down $364.1 million or 3.26% compared with $11,163 million in the previous week.

The SBP gave no reason for the decline in reserves.

Overall, liquid foreign reserves held by the country, including net reserves held by banks other than the SBP, stood at $17,067 million. Net reserves held by banks amounted to $6,268.1 million



In April, SBP's reserves increased $593 million due to official inflows. Pakistan also raised $2.5 billion in November 2017 by floating dollar-denominated bonds in the international market in a bid to shore up official reserves.

A few months ago, foreign currency reserves surged due to official inflows including $622 million from the Asian Development Bank (ADB) and $106 million from the World Bank.

Earlier, the SBP received $350 million under the Coalition Support Fund (CSF). In January, the SBP made a $500-million loan repayment to the State Administration of Foreign Exchange (SAFE), China.