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SBP Reserves Fall $266m to $10.1b: Foreign Exchange

According to data released on Thursday by the State Bank of Pakistan (SBP), the foreign exchange reserves held by the central bank decreased 2.57 per cent on a weekly basis.

On June 5, the SBP’s foreign-currency reserves were recorded at $10,095.8 million, down $266 million from $10,362.1 million the previous week.

The decrease has been attributed to external debt repayments of $301 million by the government, according to the central bank.

Overall, the country’s liquid foreign-currency reserves, including net reserves held by non-SBP banks, stood at $16,705.3 million. Bank-held net reserves stood at $6,609.5 million.

On 9 July last year, Pakistan received the first $991.4 million loan tranche from the International Monetary Fund (IMF), which helped boost the reserves. The IMF released the second loan tranche of approximately $454 million in late December.

A few months ago, on Sukuk’s maturity, the SBP successfully made a foreign debt repayment of more than $1 billion.

Due to inflows from multilateral lenders including $1.3 billion from the Asian Development Bank (ADB), foreign-exchange reserves surpassed the $10-billion mark in December 2019.

In the current fiscal year foreign investment of over $3 billion in the debt market also played an important role in the increasing reserves of foreign currency.

Previously, the reserves had spiraled downward, falling below the $7-billion mark, raising concern about Pakistan’s ability to meet its funding needs. Financial support from the United Arab Emirates (UAE), Saudi Arabia, and other friendly nations, however, helped to shore up foreign reserves.

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