Pakistan foreign exchange reserves face yet another blow
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According to data released by the State Bank of Pakistan (SBP) on Thursday, the central bank's foreign exchange reserves decreased by $81 million on a weekly basis. On August 25, the foreign currency reserves held by the SBP were reported to be $7.849 billion, reflecting a decline of $81 million compared to the reserves of $7.930 billion recorded on August 18.
In addition to the SBP's reserves, the overall liquid foreign currency reserves held by Pakistan, which includes net reserves held by banks other than the SBP, amounted to $13.171 billion. This figure marked a decrease of $77 million over the previous week. The net reserves held by banks, standing at $5.322 billion, experienced a marginal increase of $4 million during the same week.
Interestingly, this recent decrease in reserves on a weekly basis marks the fifth such decline within the last six weeks. Since July 14, the central bank's reserves have witnessed a significant drop of $878 million, with the reserves standing at $8.727 billion back then.
These fluctuations in foreign exchange reserves can have various implications for the country's economy. A decrease in reserves might impact a nation's ability to manage its currency's value and fulfill international payment obligations. Central banks often utilize foreign exchange reserves to stabilize their economies during times of economic uncertainty or to intervene in the foreign exchange market to control exchange rate movements. The recent decline in Pakistan's reserves could be a result of factors such as trade imbalances, debt repayments, or changes in global economic conditions.
