Alarm bells: Foreign exchange reserves fall below $8 billion — lowest since October 2019

• SBP says decrease comes due to external debt payments.
• Net reserves held by banks stand at $5,730.8 million.
• Pakistan has an import cover of less than 1.12 months.

KARACHI: The country’s foreign exchange reserves held by the State Bank of Pakistan (SBP) continued to decline on a weekly basis, and fell below $8 billion — the lowest level since October 11, 2019.

On August 5, the foreign currency reserves held by the SBP were recorded at $7,830.3 million, down $555 million compared with $8,385.4 on July 29, data released by the State Bank of Pakistan (SBP) on Thursday showed.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13,561.1 million.

Net reserves held by banks amounted to $5,730.8 million.

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

“Debt repayments are expected to moderate during the next three weeks of this month. In fact, around three-fourths of debt servicing for the month of August was concentrated during the first week,” the SBP said in a brief notification.

It should be noted that with the current foreign exchange reserves position, Pakistan has an import cover of fewer than 1.12 months.

Meanwhile, the Pakistani rupee gained Rs21.06 in the last nine sessions against the US dollar in the interbank market on positive economic cues.