Foreign exchange: SBP's reserves fall another 2.64%, amount to $9.62b

External debt servicing cited as reason for the decrease


Our Correspondent September 13, 2018
External debt servicing cited as reason for the decrease. PHOTO: REUTERS

KARACHI: The foreign exchange reserves held by the central bank continued to spiral downwards as they decreased 2.64% on a weekly basis, according to data released on Thursday.

On September 7, the foreign currency reserves held by the State Bank of Pakistan (SBP) were recorded at $9,624.4 million, down $260.7 million compared with $9,885.1 million in the previous week.

The reserves have fallen below the $10-billion mark, raising concerns over the country's ability to meet its financing requirements.

The decrease was attributed to external debt servicing and other official payments.

Foreign exchange: SBP's reserves plunge 3.34% to $9.88b

Overall, liquid foreign reserves held by the country, including net reserves held by banks other than the SBP, stood at $16,069.9 million. Net reserves held by banks amounted to $6,445.5 million.

A month ago, China agreed to immediately give a loan of $2 billion to Pakistan, a move meant to arrest the slide in foreign currency reserves and provide much-needed breathing space for the new government.

Of the agreed amount, $1 billion had already been transferred to the central bank account. According to officials in the Ministry of Finance, the loan will be categorised as official bilateral inflow.

Foreign exchange: SBP's reserves slip by $8.1m to $10.23b

Earlier, the reserves had dipped to an alarmingly low level of $9.06 billion, forcing the central bank to let the rupee depreciate massively on four separate occasions since December 2017 and sparking concerns about the country's ability to finance a hefty import bill as well as meet debt obligations in coming months.

In April, the SBP's reserves increased $593 million due to official inflows.

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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