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SBP-held foreign exchange reserves fall $784mn, now stand precariously at $6.71bn

  • SBP attributes decline to payment of $1,000 million against maturing Pakistan International Sukuk and some other external debt repayments
  • This is the lowest level of SBP's reserves since January 2019
Published December 8, 2022
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Foreign exchange reserves held by the State Bank of Pakistan (SBP) fell another $784 million to a precarious level of $6.715 billion as of Dec 2, 2022, data released by the central bank showed on Thursday. This is the lowest level of SBP-held reserves since January 2019.

Total liquid foreign reserves held by the country stood at $12.582 billion. Net foreign reserves held by commercial banks clocked in at $5.867 million.

"During the week ended on December 2, 2022, SBP reserves decreased by $784 million to US$ 6,714.9 million," said the SBP.

SBP-held foreign exchange reserves fall $327mn, stand at $7.5bn

"This decline is on account of the payment of US$ 1,000 million against maturing Pakistan International Sukuk and some other external debt repayments. Some of the debt repayments were offset by inflows, mainly US$ 500 million received from Asian Infrastructure Investment Bank (AIIB)."

On November 29, Pakistan received $500 million from the Asian Infrastructure Investment Bank (AIIB), the Ministry of Finance stated.

However, the development did not reflect in SBP’s data back then.

Falling reserves have increased worries over Pakistan's ability to meet debt obligations, and increased perceived default risks, especially at a time the country is in the midst of an economic crisis and recovering from devastating floods that killed over 1,700 people.

The low level has also prompted the SBP to take several administrative measures to control the outflow of dollars, and tame rupee's depreciation against the US dollar.


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Comments

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Gauravi Pal Dec 08, 2022 10:33pm
Without $500 million received from AIIB, reserves would have been $6.2 billion. With Ishaq Dar's attitude towards IMF (not very different from that if Shaukat Tarin in April 2021, it could be a while before IMF program is back on track. Those that lend with assurance of IMF program will be deterred from lending also. With a CCC rating on bonds, no bond or sukuk issuance are possible. The remittances are alao on a downward trajectory. It is unclear where the SBP governor's confidence is coming from.
thumb_up Recommended (0)
Hyder Dec 09, 2022 02:27am
But are the Papa John’s franchises okay? Because that’s the number one priority.
thumb_up Recommended (0)
Jahangir Dec 10, 2022 09:42am
@Hyder, good one
thumb_up Recommended (0)

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