Forex reserves record $237m decline

SBP mentions debt repayments for decrease in reserves

KARACHI:

Pakistan’s foreign exchange reserves recorded a notable decline of $237 million, or 3.3%, on a week-on-week basis, the State Bank of Pakistan (SBP) reported on Thursday.

As of the week ended December 1, 2023, the SBP’s foreign currency reserves stood at $7,020.2 million, a decrease of $236.8 million compared to the previous week’s total of $7,257 million.

The central bank attributed the decline in its reserves to debt repayments.

The total liquid foreign currency reserves of the country, including the reserves held by commercial banks, amounted to $12,107.1 million. Net reserves held by commercial banks stood at $5,086.9 million.

Last week, the foreign exchange reserves, held by the SBP, had increased by $77 million but the bank cited no reason for the rise.

Read: Forex reserves decline by 2.9% WoW

Earlier, the reserves dropped by $217 million due to debt repayments, slipping to less than two months of import cover at $7.2 billion. The reserves had squeezed at a time when the International Monetary Fund (IMF) is about to release its second loan tranche of $700 million following a staff-level agreement with Pakistan.

Previously, the SBP’s reserves improved when Pakistan won a $3 billion IMF standby arrangement, which led to the immediate release of $1.2 billion, and dollar deposits came from friendly nations such as Saudi Arabia and the United Arab Emirates (UAE), which deposited $3 billion into the SBP’s accounts.

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

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