SBP’s Reserves Plunge Massively Due to Debt Repayment

The foreign exchange reserves held by the central bank decreased by 20 percent on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday. On January 20, the foreign currency reserves held by the SBP were recorded at $3.678 billion, down $923 million compared to $4.601 billion on January 13. Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $9.453 billion. The net reserves held by banks stood at $5.775 billion, registering a decrease of $68 million during the week. The SBP said in a statement that the decline in reserves on a weekly basis was due to external debt repayments. According to Arif Habib Limited, the current reserves are enough for import cover of just 0.73 months (approximately just 22 days).