KARACHI: After a brief boost, the foreign exchange reserves held by the central bank plunged 6.95% on a weekly basis, according to data released on Thursday.
The reserves had been on a downward spiral for 13 successive weeks, when financial assistance from Saudi Arabia provided much-needed support to the fast depleting reserves.
The reserves had dropped to a four-and-a-half-year low, which raised concern about Pakistan’s ability to meet its financing requirements. The assistance from the kingdom pushed the reserves above $8 billion, however, now they have once again fallen below that mark.
On November 30, the foreign currency reserves held by the State Bank of Pakistan (SBP) were recorded at $7,502.1 million, down $560.3 million compared with $8,062.4 million in the previous week. The decrease was attributed to external debt servicing and other official payments.
Overall, liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13,996.1 million. Net reserves held by banks amounted to $6,494 million.
Last month, Chinese Embassy Deputy Head of Mission Zhao Lijian 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 to 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.