The foreign exchange reserves held by the State Bank of Pakistan (SBP) fell another $784 million to $6.715 billion as of 2nd December 2022.
According to the data released by the State Bank of Pakistan (SBP), the foreign reserves held by the central stood at $6,714.9 million. This is the lowest level of SBP-held reserves since January 2019.
Meanwhile, the net foreign reserves held by commercial banks were recorded at $5,866.8 million, whereas the total liquid foreign reserves held by the country stood at $12.582 billion.
Net foreign reserves held by commercial banks now stand at $5.867bn, meaning the country’s total liquid foreign reserves are now $12.58bn. Strengthening the foreign exchange reserves remained the top agenda of the new government since it took the helm in April. However, SBP’s reserves have since dropped by more than $4bn from around $10.9bn at the time.
“This decline is on account of the payment of $ 1,000 million against maturing Pakistan International Sukuk and some other external debt repayments,” the central bank said in the statement.
SBP Governor Jameel Ahmad said in a podcast on Thursday that during the last five months, inflows remained at just $4bn but the figure was expected to rise in the second half of the current fiscal year ending June 2023.
The central bank attributed the fall in foreign exchange reserves to a payment of $1bn against the maturity of Sukuk (Islamic bonds). However, a senior analyst, who wished not to be named, said the $6.7bn reserves were not calculated after the payment for bonds.
Mr. Ahmad said in the interview that the SBP paid $1bn and another $1.2bn to two commercial banks, which have agreed to lend the same amount in a few days. The State Bank said that inflows of $500m from the Asian Infrastructure Investment Bank (AIIB) offset the SBP outflows.
Remember that the demand for dollars remains high in the interbank market, while the open market offers no hard currency. The dollar rose 0.09pc to close at Rs224.37 in the interbank market on Thursday.
However, most market players don’t trust the rates given by the State Bank, saying the deals were actually being done at higher prices.