Pakistan’s forex reserves drop by $4.4 million

KARACHI: Pakistan’s foreign exchange reserves, which are the backup funds in case of an emergency such as a rapid devaluation of its currency, have fallen by $4.4 million, according to the latest data released by the State Bank of Pakistan (SBP).

The SBP’s reserves have decreased to $8.1 billion, contributing to a total reduction of $50 million in the country’s reserves in the last one week.

The decline in the reserves reflects the economic challenges faced by Pakistan, such as the current account deficit, debt repayments, and low exports.

The country’s overall reserves now stand at $13.09 billion, which include $5.08 billion held by commercial banks, after a reduction of $600,000.

Most of Pakistan’s reserves are held in US dollars, the global currency, but they also include other foreign currencies, bonds, treasury bills, and gold.

Foreign exchange reserves are used to balance payments of the country, influence the foreign exchange rate of its currency, and maintain confidence in financial markets.