Foreign exchange: SBP's reserves rise 1.97% to $10.26b due to 'official inflows'

Published: June 21, 2018
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Increase $198.7m during the week, but concern over low level remains. PHOTO: REUTERS/Jose Luis Gonzalez/Illustration

Increase $198.7m during the week, but concern over low level remains. PHOTO: REUTERS/Jose Luis Gonzalez/Illustration

KARACHI: Foreign exchange reserves held by the State Bank of Pakistan (SBP) increased 1.97% on a weekly basis for the third successive week, according to data released by the central bank on Thursday.

Earlier, foreign exchange reserves had been on a downward spiral for several weeks and depleted significantly, sparking concern over Pakistan’s ability to meet future payment obligations and manage a bulging current account deficit.

However, on June 14, foreign currency reserves held by the central bank were recorded at $10,264.3 million, up $198.7 million or 1.97% compared with $10,065.6 million in the previous week.

The increase has been attributed to official inflows.

Foreign exchange: SBP’s reserves rise 0.24% to $10.07b

Overall, liquid foreign reserves held by the country, including net reserves held by banks other than the SBP, stood at $16,798 million. Net reserves held by banks amounted to $6,533.7 million.

In April, the 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, the foreign currency reserves surged due to official inflows including $622 million from the Asian Development Bank (ADB) and $106 million from the World Bank. The SBP also 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.

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