SBP’s forex reserves fall $497m to $9.2b

Central bank cites repayment of external debt for decrease in reserves


Our Correspondent June 10, 2022
A Reuters file image of SBP logo

KARACHI:

The foreign exchange reserves held by the central bank decreased 5.10% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On June 3, the foreign currency reserves held by the SBP were recorded at $9,226.2 million, down $497 million compared with $9,722.9 million on May 27.

The central bank cited repayment of external debt as the reason for the decrease in reserves.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $15,176.5 million. Net reserves held by banks amounted to $5,950.3 million.

In the week ended August 27, 2021 the foreign exchange reserves held by the central bank soared to an all-time high of $20.15 billion after Pakistan received the general allocation of Special Drawing Rights (SDRs) worth $2,751.8 million from the 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).

Published in The Express Tribune, June 10th, 2022.

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