SBP Reserves Go Down by $784 Million in a Week to $6.7 Billion

The foreign exchange reserves held by the central bank plummeted by over 10 percent on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On December 2, the foreign currency reserves held by the SBP were recorded at $6.71 billion, down $784 million compared to $7.5 billion on November 25 due to the payment against maturing Pakistan International Sukuk and some other external debt repayments. The reserves held by the central bank are currently at their lowest level since January 2019 when they dropped to $6.6 billion (on January 18).

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $12.581 billion. The weekly depreciation means that the country’s overall liquid foreign exchange reserves are at their lowest level since 2014. Net reserves held by banks stood at $5.86 billion, registering a decrease of $12.7 million.

It is pertinent to mention here that Pakistan successfully made a repayment of $1 billion against a matured international Sukuk three days ahead of schedule on December 2.

The decrease in reserves due to the bond repayment was partially cushioned by the $500 million transferred by the Asian Infrastructure Investment Bank (AIIB) to the State Bank of Pakistan (SBP) during the week.

Last Friday, Finance Minister Ishaq Dar claimed that Pakistan expects to secure $3 billion in external financing from a friendly country in two weeks, which will take the reserves over $9 billion. The country is in dire need of external financing as the release of the International Monetary Fund (IMF) tranche has been pending since September.