SBP-held foreign exchange reserves fall another $728mn

Reserves held by the State Bank of Pakistan (SBP) decreased by a further $728 million, falling to $11.32 billion, as of April 1, 2022, revealed data released by the central bank on Thursday.

The decrease comes “largely due to debt repayment and government payment pertaining to the settlement of an arbitration award related to a mining project", said the SBP.

Meanwhile, total liquid foreign reserves held by the country fell to $17.48 billion. Net foreign reserves held by commercial banks stood at $6.16 billion.

This is a back-to-back decline, after the central bank foreign exchange reserves decreased by a massive $2.915 billion, falling to $12.05 billion last week.

The central bank had then stated that the decline reflects repayment of external debt, including repayment of a major syndicated loan facility from China. "The rollover of this syndicated facility is being processed, and is expected shortly," said SBP then.

Pakistan's foreign exchange reserves have been under pressure since December last year. While the country has been looking to build its foreign currency reserves on the back of loans, remittances, and higher exports, foreign direct investment continues to be an area of concern for policymakers.

On the other hand, the rupee continues to remain under pressure against the US dollar, and hit yet another record low to close over the 188 level at the interbank on Thursday.