KARACHI: Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.
According to the data released by the State Bank of Pakistan (SBP) on Thursday, the foreign exchange reserves of the country fell $449 million to $17.028 billion by the week ended April 8, 2022, compared with $17.477 billion a week ago.
The foreign exchange reserves were at $17.971 billion by the week ended June 26, 2020.
Pakistan’s foreign exchange reserves have declined $10.23 billion in the last seven months, owing to extreme pressure of the dollar demand for import payments and external repayments of government debt.
The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.
The forex reserves are falling for the last nine consecutive weeks and recorded a decline of $6.69 billion since February 4, 2022, when the reserves were at $23.721 billion.
The official forex reserves of the central bank, which is the benchmark for calculating the financial strength of a country, also fell to $10.85 billion, which are less than two months of import cover.
The import bill for March 2022 stood at $6.186 billion, according to the Pakistan Bureau of Statistics.
The official forex reserves of the central bank are at the lowest level since June 2020. The SBP’s forex reserves also included $3 billion received from Saudi Arabia to support the balance of payments position.
The official foreign exchange reserves of the SBP were at $11.23 billion by the week ended June 26, 2020.
The central bank witnessed a weekly decline of $469 million to $10.85 billion by the week ended April 8, 2022, compared with $11.32 billion a week ago or April 1, 2022.
Previously, the State Bank recorded an all-time high official foreign exchange reserves of $20.15 billion by the week ended August 27, 2021 after Pakistan received around $2.75 billion from the International Monetary Fund (IMF) under the general allocation of Special Drawing Rights.
To boost foreign exchange reserves, the country raised Eurobonds worth $2.5 billion on March 30, 2021.
The forex reserves also climbed on account of $2.5 billion inflows received from China. In 2020, the SBP successfully made foreign debt repayment of over $1 billion on the maturity of Sukuk.
Experts believe that the recent fall in the foreign exchange reserves would adversely affect the local currency.
