Foreign exchange: SBP reserves rise $1.18b to $12.07b

Increase comes due to receipt of $1.39b from IMF

KARACHI: The foreign exchange reserves held by the central bank increased 10.85% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On April 24, the foreign currency reserves held by the SBP were recorded at $12,070.3 million, up $1,181 million compared with $10,889.2 million in the previous week.

The central bank attributed the increase to receipt of $1.39 billion from the International Monetary Fund (IMF) under the Rapid Financing Instrument (RFI) to cushion the economic impact of the Covid-19 shock.

“The SBP has also made government’s external debt repayments amounting to $234 million,” the central bank said in a statement.

Overall, liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $18,463 million. Net reserves held by banks amounted to $6,392.7 million.

Pakistan received the first loan tranche of $991.4 million from the IMF on July 9 last year, which helped bolster the reserves. In late December, the IMF released the second loan tranche of around $454 million.

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

A couple of months ago, the SBP successfully made a foreign debt repayment of over $1 billion on the maturity of Sukuk.

In December 2019, the foreign exchange reserves surpassed the $10-billion mark owing to inflows from multilateral lenders including $1.3 billion from the Asian Development Bank (ADB).

Foreign investment of over $3 billion in the debt market in the current fiscal year also played an important role in the growing foreign currency reserves.

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), Saudi Arabia and other friendly nations helped shore up the foreign exchange reserves.