Pakistan’s foreign exchange reserves decline by $257.3 million in one week

WEB DESK: In the week ending October 20, 2023, the State Bank of Pakistan (SBP) experienced a decline in its foreign exchange reserves.

According to data released by the central bank on Thursday, SBP’s reserves decreased by $219.8 million, marking a 2.85 per cent drop to $7.49 billion. This reduction was primarily due to debt repayments.

Simultaneously, the country’s overall reserves also saw a decline. The total reserves fell by $257.3 million, or 1.99 per cent, week over week, reaching $12.66 billion.

Commercial banks also faced a decrease in their reserves, which diminished by $37.5 million, or 0.72 per cent, to $5.16 billion.

It’s worth mentioning that following the signing of the Staff Level Agreement (SLA) with the International Monetary Fund (IMF), the country’s liquid foreign reserves received a significant boost.

Read more: Pakistani rupee continues decline against US dollar, closes at Rs280.09

This included a $1.2 billion immediate disbursement from the IMF, a $2 billion deposit from Saudi Arabia, and an additional $1 billion deposit from the United Arab Emirates (UAE).

As a result, in the current fiscal year, total liquid foreign reserves have increased by $3.47 billion, marking a notable 37.84 per cent rise.

However, despite the initial boost from the IMF and Arab countries, fresh inflows seem to have slowed down.

The total reserves are gradually depleting, almost every week. In the current calendar year alone, there has been an increase of $1.81 billion, or 16.69 per cent.

Overview of foreign exchange reserves and weekly changes

State Bank of Pakistan:

Friday, October 20, 2023: $7.49 billion

Friday, October 13, 2023: $7.71 billion

Reduction: -$219.8 million

Percentage change: -2.85 per cent

Net foreign reserves held by banks:

Friday, October 20, 2023: $5.16 billion

Friday, October 13, 2023: $5.20 billion

Reduction: -$37.5 million

Percentage change: -0.72 per cent

Total liquid foreign reserves:

Friday, October 20, 2023: $12.66 billion

Friday, October 13, 2023: $12.91 billion

Reduction: -$257.3 million

Percentage change: -1.99 per cent