Pakistan’s Foreign Exchange Reserves Dip by $21 Million

The State Bank of Pakistan (SBP) has revealed that the country’s foreign exchange reserves have decreased by $21 million within a week, reaching $7.615 billion by September 28, according to data released on Thursday.

The country’s total liquid foreign reserves, including the SBP and commercial banks, were reported at $13.03 billion, with commercial banks holding net foreign reserves of $5.415 billion.

The central bank did not provide specific reasons for this decline. In a statement, SBP noted, “During the week ending on 28-Sep-2023, SBP’s reserves decreased by US$ 21 million to US$ 7,615.4 million.” This comes after a significant decrease of $59 million in the previous week.

Earlier this year, Pakistan received a boost in its reserves when it received the first tranche of approximately $1.2 billion from the International Monetary Fund (IMF) after the approval of a new $3-billion stand-by arrangement.

Additionally, inflows were received from Saudi Arabia and the UAE. Despite these positive developments, the central bank’s reserves have been facing challenges due to debt repayments, increased import payments following eased restrictions, and a lack of fresh inflows.

The decline in foreign exchange reserves has raised concerns about Pakistan’s ability to meet its financial obligations and maintain stability in the foreign exchange market. Experts suggest that addressing the underlying economic issues and promoting foreign investments will be crucial in stabilizing the country’s reserves in the coming months.