SBP Reserves Fall by $479 Million in One Week

Pakistan’s foreign exchange reserves declined to $26.40 billion in the week that ended September 17, the State Bank of Pakistan (SBP) said on Thursday. The country’s total liquid foreign reserves declined to $26.40 billion on 17 September, from $27.06 billion in the prior week. This was due to the repayment against foreign loans to different countries and lending agencies. The foreign currency reserves held by the SBP were recorded at $19,543.4 million, down by $479 million from $20,022.7 million recorded on September 10. Meanwhile, the foreign reserves of commercial banks fell to $6.86 billion during this period, down from $7.04 billion in the prior week. In contrast, back on August 27, foreign exchange reserves held by the central bank surged to a record-high of $20.15 billion after Pakistan received its allocation of Special Drawing Rights (SDRs) worth $2,751.8 million from the International Monetary Fund (IMF). Talks with the IMF over an additional $1 billion loan under its $6 billion loan program will start on 4 October. Despite the decline, Pakistan’s foreign exchange reserves have maintained an overall positive trend in the past few months, amid vulnerabilities in the current account and a sharp depreciation in the Pakistani Rupee (PKR). Pakistan’s current account deficit in July and August in the current fiscal year was $2.29 billion as compared to a net surplus of $838 million in the same period in FY 2021. The PKR dropped to an all-time low of 169.12 against the US dollar on September 15.