Forex reserves fall by $72m to $4.3b
PHOTO: FILE
The foreign exchange reserves held by the central bank fell by 1.6% on a week-on-week basis to $4.3 billion, according to data released by the State Bank of Pakistan (SBP) on Thursday.
On May 12, 2023, the SBP’s foreign currency reserves stood at $4,311.9 million, down by $72 million as compared to $4,383.4 million on May 5. The central bank attributed the decrease in reserves to external debt repayment.
Overall, the liquid foreign currency reserves held by the country, including the net reserves held by banks other than the SBP, stood at $9,937.5 million. The net reserves held by banks amounted to $5,625.6 million.
Ismail Iqbal Securities Head of Research Fahad Rauf has said that any significant improvement in Pakistan’s foreign currency reserves depends on the revival of International Monetary Fund’s (IMF) loan programme and the inflow of fresh financing from other multilateral and bilateral creditors.
“They (FX reserves) are projected to rise to around $7-8 billion by the end of current fiscal year on June 30, 2023,” he said.
Forex reserves improved slightly in the recent past after the central bank opted to buy US dollars in the wake of increased supply of the greenback compared to its demand. However, the current critically low reserves have heightened chances of debt default by Pakistan if the IMF loan programme remains off track.
Published in The Express Tribune, May 19th, 2023.
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