Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by $66 million on a weekly basis, clocking in at $8.15 billion as of January 5, data released on Thursday showed.

Total liquid foreign reserves held by the country stood at $13.25 billion. Net foreign reserves held by commercial banks stood at $5.10 billion.

The SBP attributed the decline in the reserves to debt repayments.

“During the week ended on 5-Jan-2024, SBP’s reserves decreased by US$ 66 million to US$ 8,154.8 million due to debt repayments,” it said.

The development comes after the central’s banks dollar stockpile boosted over $1 billion in just two weeks.

Last week, Pakistan’s central bank reserves witnessed a significant increase of $464 million. It had jumped by $852 million in the week earlier.

The increase was on the back of official government inflows, according to the SBP.

SBP reserves are still above $8 billion, which was earlier seen in last year after Pakistan received the first tranche of around $1.2 billion from the International Monetary Fund (IMF) after the lender approved a $3-billion Stand-By Arrangement (SBA). The country also got inflows from Saudi Arabia and the UAE.

However, the reserves remained under pressure since then due to debt repayments, rise in import payments after easing restrictions, and a lack of fresh inflows.

In a major breakthrough, the IMF announced on November 15 that its staff and Pakistani authorities had reached an agreement on the first review of the SBA.

The staff-level agreement is subject to approval by the IMF Executive Board, which is scheduled to meet today.

“The IMF team has reached a staff-level agreement (SLA) with the Pakistani authorities on the first review of their stabilisation program supported by the IMF’s US$3 billion (SDR2,250 million) SBA,” the IMF said in its press release then.

“The agreement is subject to approval of the IMF’s Executive Board. Upon approval around US$700 million (SDR 528 million) will become available bringing total disbursements under the program to almost US$1.9 billion,” it added.

The expected inflow from the IMF will help increase the SBP reserves.

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