Foreign exchange: SBP reserves surge 10.6% after release of Saudi aid

Stand at $8.1b; increase attributed to official bilateral inflows

KARACHI: Foreign exchange reserves held by the central bank surged 10.6% on a weekly basis, breaking the downward streak of the past 13 weeks, according to data released on Thursday.

The reserves had dropped to a four-and-a-half-year low, which had raised concern about Pakistan's ability to meet its financing requirements as they had fallen below the $7.5-billion mark.

On November 23, the foreign currency reserves held by the State Bank of Pakistan (SBP) were recorded at $8,062.4 million, up $775.9 million compared with $7,286.5 million in the previous week. The increase was attributed to official bilateral inflows.

The surge came after the Saudi Arabian government released $1 billion under the promised $3-billion financial assistance.

Overall, liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $14,572.6 million. Net reserves held by banks amounted to $6,510.2 million.

Chinese Embassy Deputy Head of Mission Zhao Lijian has also assured Pakistan of a financial package to boost its flagging foreign currency reserves, hinting that it would be bigger than that pledged by Saudi Arabia.



More than 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.

Earlier, the reserves dipped to $9.06 billion, forcing the central bank to let the rupee depreciate massively for the fourth time since December 2017 and sparking concern 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 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) earlier.

In January, the SBP made a $500-million loan repayment to the State Administration of Foreign Exchange (SAFE), China.