SBP Reserves Decline For Third Straight Week

The foreign exchange reserves held by the central bank declined by 1.7 percent on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday. On May 12, the foreign currency reserves held by the SBP were recorded at $4.312 billion, down $72 million compared to $4.383 billion on May 5. The central bank said in a statement that the decline in reserves was due to external debt repayment. Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $9.938 billion, down $53 million over the previous week. The net reserves held by banks stood at $5.626 billion, registering an increase of $19 million during the week. This means that Pakistan currently doesn’t have enough reserves to cover even one month of imports. 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.