Pakistan’s Forex Reserves Plunge by $90 Million

Pakistan’s liquid foreign reserves witnessed an outflow of $90 million on account of debt servicing in the week ending on December 10, 2021.

According to the data released by the State Bank of Pakistan (SBP), the foreign exchange reserves decreased to $18.56 billion in the week. During the week, the foreign exchange reserves of commercial banks stood at $6.4 billion.

The foreign exchange reserves recorded inflows of over $2.6 billion in the previous week as part of the financial cover from the brotherly state of the Kingdom of Saudi Arabia.

The inflows from Saudi Arabia will provide a cushion to the foreign exchange reserves for the next few months. However, the value of the Rupee against the Dollar has failed to recover despite the Saudi injection.

In order to minimize the pressure of foreign exchange outflows, the country needs to explore other avenues to build reserves.