Pakistan foreign exchange reserves register significant decline

Pakistan foreign exchange reserves register significant decline

In the week ending October 20, 2023, the State Bank of Pakistan (SBP) encountered a decline in its foreign exchange reserves. According to data released by the central bank on Thursday, SBP's reserves decreased by $219.8 million, marking a 2.85 per cent drop to $7.49 billion. This reduction was primarily attributed to debt repayments.

Simultaneously, the country's overall reserves also witnessed a decrease. The total reserves fell by $257.3 million, or 1.99 per cent, week over week, reaching $12.66 billion. Commercial banks also experienced a decrease in their reserves, which diminished by $37.5 million, or 0.72 per cent, to $5.16 billion.

It's important to note that, subsequent to the signing of the Staff Level Agreement (SLA) with the International Monetary Fund (IMF), the country's liquid foreign reserves received a substantial boost.

This boost included a $1.2 billion immediate disbursement from the IMF, a $2 billion deposit from Saudi Arabia, and an additional $1 billion deposit from the United Arab Emirates (UAE).

As a result, in the current fiscal year, total liquid foreign reserves have increased by $3.47 billion, marking a notable 37.84 per cent rise.