After surpassing the $10-billion mark last week, foreign exchange reserves held by the State Bank of Pakistan (SBP) plunged $493 million owing to external debt repayments, said the central bank on Thursday.

On June 24, the SBP-held reserves had received a boost after proceeds of the CDB loan amounting to RMB 15 billion (roughly $2.3 billion) were received by the central bank. As a result, they rose to $10.3 billion.

SBP-held foreign exchange reserves go over $10bn after Chinese loan

However, during the week ended on 30-Jun-2022, SBP’s reserves decreased by $493 million to $9.82 billion due to external debt and other payments.

Meanwhile, total liquid foreign reserves held by the country stood at over $15.74 billion with net foreign reserves held by commercial banks clocking in at $5.93 billion.

Falling reserves have been mounting pressure on the rupee that registered a marginal gain against the US dollar to close near the 208 level in the inter-bank market on Thursday.

Rupee registers marginal gain against US dollar

As per the State Bank of Pakistan (SBP), the local currency settled at 207.91, an appreciation of eight paisas or 0.04%, against the greenback.

A low level of foreign exchange reserves has been a source of headache for economic policymakers who have been knocking harder on the doors of the International Monetary Fund (IMF) for revival of Pakistan's Extended Fund Facility (EFF).

Just before the Chinese inflow, foreign exchange reserves held by the SBP had decreased a massive $748 million on a weekly basis, falling to a critical $8.24 billion as of Jun 17, 2022.