SBP Reserves Decline Again as Repayments Loom

The foreign exchange reserves held by the central bank declined by 1.6 percent on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday. On May 5, the foreign currency reserves held by the SBP were recorded at $4.383 billion, down $74 million compared to $4.457 billion on April 28. Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $9.990 billion, down $53 million over the previous week. The net reserves held by banks stood at $5.607 billion, registering an increase of $21 million during the week. Due to the decline in reserves, the import cover is now down to 0.96 months according to Arif Habib Limited. It is pertinent to mention here that Pakistan has to repay $3.7 billion by the end of June 2023. However, in a recent statement, the Ministry of Finance assured that the repayment should not be a cause of concern as arrangements have been made for the rollover/repayment of this debt. The ministry further said that during this period significant inflows are also in the pipeline.