According to statistics provided by the State Bank of Pakistan (SBP) on Thursday, the central bank’s foreign currency reserves fell by 3. percent on a weekly basis.
The SBP’s foreign currency reserves were $7.597 billion on October 7, down $303 million from $7.899 billion on September 30. The reserves are now at their lowest level since July 2019.
According to the central bank, the fall in reserves was “totally” due to external debt obligations, which included repayment of a commercial loan and interest payments on Euro bonds.
The country’s total liquid foreign currency reserves, comprising net accounts held by banks other than the SBP, were $13.24 billion. Bank net reserves were $5.649 billion, down $39 million from the previous year.
It is also worth noting that the government must pay $1 billion in December bond payments.
The State Bank of Pakistan (SBP) denied any participation in the strengthening of the Pakistani Rupee (PKR) versus the US Dollar (USD) on Monday. It dismissed reports that it had sold dollars in the market.
The central bank said that it expects foreign currency reserves to increase with secured external funding and new commitments. In the wake of the floods, the Asian Development Bank (ADB), World Bank (WB), and Asian Infrastructure Investment Bank (AIIB) have offered to give assistance/financing totaling $1.5 billion, $1-2 billion, and $0.5 billion, respectively.
The central bank’s reserves reached $8.8 billion on September 2 after receiving a $1.16 billion loan tranche from the IMF. However, the central bank’s reserves have fallen by $1.18 billion since September 2 as the nation has failed to garner significant investment from friendly countries.
