KARACHI – Amid the ongoing political chaos in Pakistan, foreign exchangereserves held by the State Bank of Pakistan (SBP) have plunged to 10.45percent, an alarming level and a four-year low.
According to the data released by the central bank, SBP’s foreign currencyreserves were recorded at $6,714.9 million on December 2, down by $784million compared to $7,825.7 on November 25.
Pakistan foreign exchange reserves have fallen below $7 billion for thefirst time since January 2019.
The current reserves stand at around $6.7 billion — almost equal to $6.6billion on January 18, 2019.
Overall liquid foreign currency reserves held by the country — includingnet reserves held by banks other than the SBP — stood at $12,581.7 million.
Net reserves held by banks amounted to $5,866.8 million. The central bankattributed the decline to the payment of $1,000 million against maturingPakistan International Sukuk and some other external debt repayments.
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The SBP mentioned that some of the debt repayments were offset by inflows,mainly $500 million received from Asian Infrastructure Investment Bank(AIIB).
With the current foreign exchange reserves position, Pakistan has an importcover of less than one month.
The $6.7 billion reserves are not enough to service the $8.8 billionprincipal and interest payments during the January-March period of thecurrent fiscal year.
