SBP Reserves Shrink by $340 Million to $8 Billion

The foreign reserves held by the State Bank of Pakistan (SBP) witnessed outflows of $340 million in the week that ended on September 23, 2022, depicting a 4 percent decline on a week-on-week basis.

The SBP weekly report released on Thursday revealed that the country’s total liquid foreign exchange reserves went down by $308 million (-2.1 percent) on September 23, 2022, to $13.76 billion, compared to $14.07 billion in the previous week.

The SBP reserves decreased by $340.5 million to $8.005 billion (-4.0 percent), compared to $8.346 billion a week earlier.

Meanwhile, the net foreign reserves held by the commercial banks stood at $5.75 billion, depicting an increase of $32.5 million (0.5 percent) on a weekly basis.

During the week ended on 23-September, SBP’s reserves decreased due to external debt repayment and related services. Reserves increased earlier this month when the central bank received a $1.2-billion tranche from the International Monetary Fund (IMF). Later, the Saudi Development Fund extended a $3 billion deposit with the SBP, which was due to mature in December 2022.

Ishaq Dar, Pakistan’s new finance minister, said on Wednesday that he will work to reduce inflation while cutting interest rates, claiming that the rupee is undervalued and promising a strong response to the South Asian country’s worst economic crisis.

In his fourth stint at the helm of financial management, Dar is faced with depleting foreign reserves that are barely enough to cover a month’s imports, historic lows in the rupee, inflation of more than 27 percent, and the aftermath of devastating floods.