SBP-held foreign exchange reserves rise $67mn, now stand at $7.9bn

The foreign exchange reserves held by the State Bank of Pakistan (SBP) rose $67 million, clocking in at still an alarming level of $7.9 billion as of August 12, 2022, as policymakers in the country continued to scramble over securing dollar inflows and provide breathing room to the economy.

Total liquid foreign reserves held by the country stood at $13.61 billion, said the SBP on Thursday. Net foreign reserves held by commercial banks amounted to $5.72 billion.

Critical: SBP-held foreign exchange reserves fall $555mn, now stand at $7.83bn

"During the week ended August 12, 2022, SBP’s reserves increased by $67 million to $7,897.3 million,” the SBP said in a statement.

The reserves’ position is critical for Pakistan which is desperately seeking dollar inflows to meet its balance-of-payments needs. A low level of reserves caused severe pressure on its currency market with the rupee witnessing its worst monthly performance in July in over 50 years.

Since then, the rupee has gained on grounds that Pakistan met all prior conditions of the International Monetary Fund (IMF), a development that would help it secure $1.17 billion of inflow under the Extended Fund Facility (EFF). Additionally, an official source in Abu Dhabi also emphasised the UAE's intention to invest $1 billion in Pakistani companies in various economic and investment sectors.

It also required a combination of an improvement in Pakistan’s trade deficit and realisation of export proceeds to halt a slide that saw the rupee close in on the 240 level in the inter-bank market.

The Pakistani rupee closed near the 214.95 level on Thursday. On Wednesday, the rupee had ended its 11-session appreciation run, as the local currency fell 0.46% to settle at 214.88 against the US dollar in the inter-bank market.