KARACHI: Foreign exchange reserves held by the State Bank of Pakistan (SBP) plunged 3.16% on a weekly basis, according to data released by the central bank on Thursday, raising concerns over the country’s ability to finance a hefty import bill and meet debt obligations in coming months.
On July 6, foreign currency reserves held by the central bank were recorded at $9,479.5 million, down $309.3 million compared with $9,788.8 million in the previous week.
The decrease was due to external debt and other official payments, according to the SBP statement.
Overall, liquid foreign reserves held by the country, including net reserves held by banks other than the SBP, stood at $16,084.3 million. Net reserves held by banks amounted to $6,604.8 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.
The low level of reserves has already put severe pressure on the Pakistani rupee that has witnessed three rounds of devaluation, cumulatively shedding over 13% to the US dollar in the last six months. With reserves now falling below the $9.5-billion mark and an import bill hovering around $6 billion a month, concerns have increased over an imminent balance of payments crisis.