Foreign exchange: SBP reserves jump 12.9% to $8b

Published: July 18, 2019
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lower than the annual target of 6.5 percent. PHOTO: FILE

lower than the annual target of 6.5 percent. PHOTO: FILE

KARACHI: The foreign exchange reserves held by the central bank jumped by a massive 12.9% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

The increase came after Pakistan received first tranche from the International Monetary Fund (IMF) of $991.4 million on July 9.

Earlier, the reserves had spiralled downwards, falling below the $7-billion mark, which raised concern over Pakistan’s ability to meet its financing requirements. However, financial assistance from the United Arab Emirates (UAE) and Saudi Arabia helped shore up the foreign exchange reserves.

On July 12, the foreign currency reserves held by the SBP were recorded at $8,001.3 million, up $917.7 million compared with $7,083.6 million in the previous week.

“After taking into account outflows relating to external debt and other official payments, the SBP reserves increased by $918 million during the week,” the statement added.

Overall, liquid foreign currency reserves, held by the country, including net reserves held by banks other than the SBP, stood at $15,249.2 million. Net reserves held by banks amounted to $7,247.9 million.

Previously, the reserves had jumped on account of $2.5 billion in inflows from China.

Over time, the declining reserves have forced the central bank to let the rupee depreciate massively, sparking concern about the country’s ability to finance a hefty import bill as well as meet debt obligations in coming months.

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

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