SBP foreign exchange reserves drop to $4.3b

The foreign exchange reserves of the State Bank of Pakistan (SBP) dropped to $4.3, lowest since February 2014 as the country is now having funds for only three-week imports.

The SBP said on Thursday its reserves decreased by $1.23bn during the week ending on Jan 6 due to external debt repayments.

The country has been facing a serious dollar shortage, which is resulting in restricted imports of even food and industrial raw materials. The latest position of foreign exchange reserves reflects that the country doesn’t have sufficient dollars to cover even one month of average imports.

Net foreign exchange reserves held by commercial banks amounted to $5.84bn while the total liquid foreign exchange reserves were $10.18bn, data showed.

Last week, the foreign exchange reserves held by the State Bank of Pakistan (SBP) continued their declining spree, plunging by $245 million to reach $5.58 – the lowest level since April 2014, according to the data issued by the central bank.

The total liquid foreign reserves held by the country stood at $11.43 billion. Meanwhile, the net foreign reserves held by commercial banks stood at $5.85 billion. In the 18 months, the foreign exchange reserves fell by $1.3 billion, which is equivalent to only three-month import expenses.

On July 2, 2021, reserves held by other banks were around $7.183 billion.

“During the week ended on December 30, 2022, SBP-held foreign exchange reserves decreased by $245 million to $5,576.5 million due to external debt repayment,” said the central bank.