SBP-held foreign exchange reserves decrease further by $81mn, now stand at $7.85bn

Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by another $81 million on a weekly basis, clocking in at $7.85 billion as of August 25, data released on Thursday showed.

Total liquid foreign reserves held by the country stood at $13.17 billion. Net foreign reserves held by commercial banks stood at $5.32 billion.

The central bank cited debt repayments as the reason for the decrease in the foreign currency reserves.

“During the week ended August 25, 2023, SBP’s reserves decreased by $81 million to $7,849.3 million on account of debt repayments,” it said.

Last week, foreign exchange reserves held by the SBP had decreased by $125 million.

In July, reserves held by the SBP got a boost as Pakistan received the first tranche of about $1.2 billion from the International Monetary Fund (IMF) after its lender approved a new $3-billion Stand-By Arrangement.

However, the central bank reserves are now under pressure on the back of debt repayments, rise in import payments after ease in restrictions, and lack of fresh inflows.

After reporting a surplus for four successive months, Pakistan’s current account posted a deficit of $809 million in July, the highest since October 2022.

Meanwhile, the Pakistani rupee’s downward trajectory continued as it dropped to yet another record low against the US dollar, settling at 305.54 in the inter-bank market on Thursday. At close, the rupee was down Rs1.09 or 0.36%, as per the SBP. This was its 10th successive fall in the inter-bank market.