SBP’s kitty: Forex reserves fall, data shows

Decline of 4.4% follows external debt servicing of $142 million.

KARACHI: Foreign exchange reserves held by the State Bank of Pakistan (SBP) recorded a week-on-week decrease of 4.4% on April 4, according to data released by the SBP on Thursday.

The central bank’s foreign exchange reserves decreased by $229 million to $4.9 billion compared to $5.1 billion in the preceding week.

The decrease in the central bank’s reserves is due to external debt servicing of $142 million, including $109 million payment to the International Monetary Fund (IMF) on account of the Stand-by Arrangement (SBA), and other official payments, according to a spokesman for the SBP.



Total liquid foreign reserves held by the country, including net foreign reserves held by banks other than the SBP, stood at $9.7 billion while net foreign reserves held by banks amounted to $4.7 billion on April 4.

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 currency.

More recently, the government has raised $2 billion from international debt markets by issuing of five- and 10-year dollar-denominated Eurobonds. Under the $6.8 billion bailout package, the IMF requires Pakistan to increase its gross official reserves to $9.4 billion by the end of the current fiscal year.

After the successful issue of Eurobonds, the government is betting on the World Bank and the Asian Development Bank to meet the remaining shortfall.

Published in The Express Tribune, April 11^th, 2014.

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