Foreign exchange: SBP reserves fall $691m to $16.3b

The foreign exchange reserves held by the central bank fell 4.07% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On November 19, the foreign currency reserves held by the SBP were recorded at $16,254.1 million, down $691 million compared with $16,945.4 million on November 12.

According to the central bank, the decline was witnessed mainly due to external debt repayment.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $22,773.8 million. Net reserves held by banks amounted to $6,519.7 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).