Foreign exchange: SBP reserves fall $1.65b to $17.5b

Drop comes due to external debt repayment particularly against Pakistan Sukuk

KARACHI:

The foreign exchange reserves held by the central bank fell 8.6% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On October 15, the foreign currency reserves held by the SBP were recorded at $17,492.2 million, down $1.65 billion compared with $19,138.4 million on October 8.

According to the central bank, the decrease came on the back of external debt repayment that included repayment of $1 billion against Pakistan International Sukuk.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $24,327.4 million. Net reserves held by banks amounted to $6,835.2 million.

Earlier in the week ended on August 27, the foreign exchange reserves held by the central bank soared to an all-time high of $20.15 billion after Pakistan received general allocation of Special Drawing Rights (SDRs) worth $2,751.8 million from the International Monetary Fund (IMF) on August 24.

On March 30, 2021, Pakistan borrowed $2.5 billion through Eurobonds by offering lucrative interest rates to lenders aimed at building the foreign exchange reserves.

It received the first loan tranche of $991.4 million from the IMF on July 9, 2019, which helped bolster the reserves. In late December 2019, the IMF released the second loan tranche of around $454 million.

The reserves also jumped on account of $2.5 billion in inflows from China. In 2020, the SBP successfully made 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).