ISLAMABAD: About $3 billion decline in the foreign exchange reserves of State Bank has caused a further blow to the value of rupee against dollar which increased to around 184 rupees in the inter-bank and above 185 rupees in the open market.
On Thursday evening, the central bank has reported decline in its reserves to $12.04 billion after repayment of $2.4 billion loans to China and markup payment last week.
Importantly, since August 2021, the forex reserves of the central bank have declined by $8.026 billion (to $12.047 billion) from $20.073 billion in August 2021. And $2 billion inflows from IMF and Sukuk bonds sale did not curb decline in the reserves of the SBP.
The SBP, nonetheless, did not indicate the specific figure as repayment to Chinese syndicated loans.
The State Bank of Pakistan said that Pakistan would receive this amount from China after the process of rollover of syndicated loan is completed.
Pakistan’s Foreign Minister Shah Mehmood Qureshi, who visited China a couple of days ago to attend Afghan Moot said that his Chinese counterpart had assured him that Beijing has agreed to rollover $2.4 billion commercial loans to Pakistan.
The ongoing political crisis in Pakistan has also led to outflows of foreign investments in the domestic bonds which weakened the local currency. About $387 million from the Pakistan Investment Bonds and treasury bills left Pakistan in March alone.
Furthermore, $12 billion current account deficit in eight months of the current fiscal year indicates erosion in the foreign exchange reserves, pressure on the dollar-rupee exchange rate and flight of the capital.
By including the reserves of the commercial banks, at present, the country’s overall reserves have dropped to $18.554 billion.
