Going down: Debt servicing reduces forex reserves

Data reveals reserves down to $4.42 billion.

KARACHI: Foreign exchange reserves held by the State Bank of Pakistan (SBP) recorded a week-on-week decrease of 7.93% on March 21, according to data released by the SBP on Thursday.

The central bank’s foreign exchange reserves decreased $382 million to $4.42 billion during the week.

The decrease in the central bank’s reserves is due to external debt servicing of $248 million, inclusive of $57 million repayment to the International Monetary Fund (IMF), and other official flows, according to a SBP spokesperson.



Total liquid foreign reserves held by the country, including net foreign reserves held by banks other than the SBP, stood at $9.14 billion on March 21, down 5.23% from the corresponding figure reported for the week ending on March 14.

Net foreign reserves held by banks amounted to $4.71 billion on March 21, which is 2.54% less than the corresponding figure reported a week earlier. Pakistan recently received $1.5 billion as a ‘gift’ from an unidentified Muslim country, which resulted in a sudden hike in the country’s foreign exchange reserves and a strengthening of the currency.

The IMF’s executive board on March 24 approved the third loan tranche of $540 million for Pakistan, which is going to support the country’s foreign exchange reserves position in coming weeks.

Published in The Express Tribune, March 28^th, 2014.

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