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Thursday Jul 28 2022
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Foreign exchange reserves fall below $9 billion

An employee of a money changer holds a stack of U.S. dollar notes before giving it to a customer in Jakarta, October 8, 2015. — Reuters/File
An employee of a money changer holds a stack of U.S. dollar notes before giving it to a customer in Jakarta, October 8, 2015. — Reuters/File

  • SBP says decrease comes due to external debt payments.
  • Net reserves held by banks stand at $5,839.5 million.
  • Pakistan has an import cover of less than 1.5 months.


KARACHI: The country’s foreign exchange reserves held by the State Bank of Pakistan (SBP) continued to decline on a weekly basis.

On July 22, the foreign currency reserves held by the SBP were recorded at $8,575.16 million, down $754 million compared with $9,328.6 on July 15, data released by the State Bank of Pakistan (SBP) on Thursday showed.

According to the central bank, the decrease came due to external debt and other payments.

— JS Global
— JS Global

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $14,414.6 million.

Net reserves held by banks amounted to $5,839.5 million.

It should be noted that with the current foreign exchange reserves position, Pakistan has an import cover of less than 1.5 month.

Meanwhile, the Pakistani rupee nosedived by Rs3.92 in a single day to hit an all-time low at Rs239.94 against the dollar in the interbank market today; however, the SBP cannot smoothen the disorderly movement because of limited foreign exchange reserves position, as well as bindings of the International Monetary Fund (IMF) considerations.

However, with Pakistan reaching a staff-level agreement with the Fund foreign exchange reserves are expected to improve after the receipt of $1.17 billion from the global lender.

Emerging markets analyst Emre Akcakmak highlighted that Pakistan's international reserves with the central bank continued to decline in the week ending July 22.

"If [country] doesn't receive Chinese loan, reserves would be $6.3 billion," he warned.

Taking to his Twitter, the analyst said that pace of drawdown isn't slowing. "It's accelerating. Pakistani rupee weakening because this can't go on forever," he added.