The foreign exchange reserves of the country recorded a reverse trend in March down by nearly $2 billion in the worst period in 2020.
According to the State Bank of Pakistan, foreign exchange reserves of the county peaked at $18.90 billion by March 6 — the highest ever level since last four years however it did not maintain its level but significantly saw a steep decline of $1.91 billion in the subsequent 29 days to reach $16.9 billion by April 3.
Due to this sudden outflow of the reserves, the Rupee weakened to a record low against the Dollar during the period touching 169. Later, the local currency recovered to 167.5 but it remains under pressure.
The central bank said the scheduled payment of loans to various agencies and other official payments caused this decline in the reserves in the last four weeks. The payment also included the dividends to the investors made in the debt securities or government bonds by the foreign investors.
In the last few weeks, the country also received foreign assistance from various agencies on the account of aid to fight COVID-19, including an amount of $200 million from the World Bank. It is also expected that $50 million from Asian Development Bank and $1.4 billion from International Monetary Fund (IMF) in the next few months will likely ease off the situation of reserves and the value of Rupee against Dollar.
During the period of the last four weeks, the foreign exchange reserves of the State Bank of Pakistan declined from $12.78 billion to $10.72 billion by the end of the outgoing week.
Moreover, foreign reserves held by commercial banks increased by $151 million to reach $6.265 billion. This shows that individuals and corporations accumulated Dollars for the purpose of investments or savings.