ISLAMABAD: The State Bank of Pakistan (SBP) has reported more than $560 million decline in its foreign exchange reserves in a week.
According to latest data of the central bank issued on Thursday (Jan 20), the SBP’s reserves have dropped to $17.03 billion, showing a net decline of $562 million in a week.
According to the SBP, the reserves have declined because of payment of external debt liabilities during second week of Jan 2022.
At present, Pakistan’s foreign debt amounted to $127 billion while in 2021-22 the country need at least $20 billion to pay its foreign loans/mark up.
Importantly, in first six months of the ongoing fiscal year, Pakistan has sustained $7.1 billion current account deficit despite a significant increase in the inflows of remittances.
However, the commercial banks have managed their foreign exchange reserves very well amid fluctuations in the dollar-rupee exchange rate on a daily basis. The outflow was $680m between August 2021 and Jan 14. The current amount of foreign exchange reserves held by commercial banks is $6.31bn. In fact, reserves of commercial banks improved by $11m during the week that ended on Jan 14.
Pakistan government is in the process to launch Islamic bonds to mop up $1 billion to 1.5 billion from the international market, which will improve foreign exchange reserves. The government is also trying to reduce its import bill to cut the trade deficit, which will ultimately improve the country’s balance of payments.