The State Bank of Pakistan’s (SBP) forex exchange holdings fell $784 million to an almost four-year low of $6.72 billion for the week ending on December 2, the central bank reported on Thursday.
The SBP reserves were last recorded below this amount during the week ending January 18, 2019, when they totaled about $6.64 billion, according to data from the central bank.
The current value of the net forex reserves held by commercial banks is $5.867 billion, making the total amount of the nation’s liquid foreign reserves $12.58 billion.
Since taking office in April, the new administration’s principal priority has been to strengthen the country’s foreign exchange reserves.
SBP’s reserves, which were formerly close to $10.9 billion, have since decreased by more than $4 billion.
Currently, the central bank only has $6.72 billion, barely enough to fund imports for more than a month.
According to analysts, the country’s ability to repay foreign debts may be made more challenging by the declining reserves.
SBP Governor Jameel Ahmad stated in a podcast on Thursday that while inflows had stayed at just $4 billion over the previous five months, they were anticipated to increase in the second half of the current fiscal year, which ends in June 2023.
The decrease in forex exchange reserves was attributed by the central bank to a payment of $1 billion against the maturity of Sukuk (Islamic bonds).
The $6.7 billion reserves, according to a top analyst who asked to remain unnamed, were not determined after the bond payment.
The SBP gave $1 billion and another $1.2 billion to two commercial banks, who committed to lending the same amount in a few days, according to Governor Jameel Ahmad in the interview.
The Asian Infrastructure Investment Bank (AIIB) announced that its $500 million infusions had countered the State Bank of Pakistan’s (SBP) outflows.
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