Forex down to $7.78b

SBP attributes $70m decline to debt repayment

KARACHI:

The State Bank of Pakistan (SBP) has reported a marginal 0.89% decline in foreign exchange reserves on a week-on-week basis, with the total now standing at $7.78 billion as of September 1, 2023. This announcement, made by the central bank on Thursday, reveals a decrease of $70 million compared to the previous week’s figure of $7.85 billion.

The SBP attributed this decline in Pakistan’s forex reserves to debt repayments. The overall liquid foreign currency reserves, which includes reserves held by commercial banks, amounted to $13.13 billion, with commercial banks accounting for $5.35 billion of the total.

July 2023 witnessed a significant improvement in reserves, primarily driven by financial assistance from the International Monetary Fund (IMF) and supportive nations. The IMF’s fresh $3 billion loan programme, spanning nine months, injected approximately $1.2 billion into Pakistan’s reserves. Additionally, deposits of $3 billion from Saudi Arabia and the UAE bolstered the nation’s economic prospects.

China also played a crucial role through loan rollovers, further strengthening the reserves, which now cover almost two months’ worth of imports. While debt repayments temporarily impacted the reserves, the recent financial inflows have injected optimism into Pakistan’s economic outlook.

Published in The Express Tribune, September 8^th, 2023.

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