The country’s foreign exchange reserves recorded a massive decline of $1.71 billion in a single week ending on 29 May. The foreign exchange reserves now stand at $16.9 billion.
The reserves contracted significantly due to the scheduled payment of the debts to various foreign countries, agencies, and banks by the country.
The huge outflow of Dollars in a single month exerted pressure on the Rupee which depreciated recently against Dollar to cross the 165 level.
During the month of May, the overall reserves fell by over $1.824 billion.
The country has to make payments of over $3 billion in June against loans and bonds to IMF and investors which will further squeeze the foreign exchange reserves.
The prevailing situation of foreign exchange reserves is getting worrisome during the period of an economic slowdown. Pakistan is looking for rescheduling of its loans from various banks and agencies in order to get immediate relief on the economic front.
In this regard, PM Imran Khan appealed the developed countries more than once not only for Pakistan but for other countries as well.
The foreign exchange reserves held by the central bank stood at $10.3 billion whereas commercial banks held Dollars’ reserves of 6.5 billion by May 29.
During the week ended 29-May-2020, SBP reserves decreased by US$ 1,712 million to US$ 10,362.1 million. This decline is primarily attributed to government’s external debt repayments of US$ 1,669.1 million.