Pakistan’s foreign exchange reserves decrease by $32 million

KARACHI: Pakistan’s foreign exchange reserves held by the central bank fell $32 million to $8.1538 billion, the State Bank of Pakistan (SBP) said on Thursday

According to a statement issued by the central bank, the country’s commercial banks’ reserves stand at $5.3099 billion

The statement said that Pakistan’s overall foreign exchange reserves remain at $13.4637 billion.

The SBP said the decline in its reserves was mainly due to external debt servicing and other official payments.

Pakistan’s foreign exchange reserves have been under pressure for the past several years due to the economic fallout of the COVID-19 pandemic, which reduced its exports and remittances.

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The country has received financial support from various sources, including the International Monetary Fund (IMF), which resumed its $6 billion loan programme in March after a year-long hiatus.

Pakistan has also secured loans and grants from China, Saudi Arabia, the World Bank and the Asian Development Bank to shore up its reserves and meet its balance of payments needs.

However, the country still faces a large external financing gap and has to repay about $10.6 billion in debt and interest payments in the fiscal year 2023, which started on July 1, according to the IMF.

The SBP has projected that the current account deficit, which measures the flow of goods, services and investments into and out of the country, will widen to 2-3% of gross domestic product (GDP) in 2023 from 0.6% in 2022.

The SBP has also kept its policy rate unchanged at 22% since November 2021, citing inflationary pressures and uncertainty over the pandemic.

The Pakistani rupee has depreciated by about 9% against the U.S. dollar since January 2021, trading at 286.45 on Thursday, according to the SBP.