The State Bank of Pakistan’s foreign exchange reserves reached an all-time high of $20.15 billion on 27 August.
The boost in reserves came after the International Monetary Fund (IMF) allocated the central bank $2.75 billion via Special Drawing Rights (SDRs). After accounting for external debt payments, the SBP’s reserves increased by 14.63 percent or $2.567 billion to $20.1456 billion compared with $17.578 billion on August 20, according to data released by the State Bank of Pakistan (SBP).
SDRs are foreign reserve assets that the IMF uses to supplement member countries’ reserves. This new allocation followed the IMF board’s decision in July to boost the institution’s lending capacity by $650 billion.
Pakistan’s total liquid foreign reserves are currently at $27.23 billion, of which commercial banks hold $7.08 billion.
Unlike its foreign reserves, the country’s trade scenario continues to weaken. The trade gap in August widened by 133 percent year-over-year amid an ongoing surge in imports.
Similarly, the Rupee has depreciated sharply over the past months. Yesterday, it closed at its lowest level against the US Dollar in 13 months.
However, with its flexible market-based exchange rate policy, the SBP shows no signs of intervening in the market to halt the Rupee’s devaluation.
