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Reserves down by $170mn in a week due to external debt-servicing, imports

KARACHI: The State Bank of Pakistan in its weekly report on foreign exchange reserves has reported a decline of $170mn in the reserves, primarily because of payments in lieu of external debts and other payments including imports. 

On December 21, 2018, the reserves held by the central bank stood at $7.457bn whereas the forex reserves available with the commercial banks were at $6.560bn level.

However, due to debt-servicing and other payments amounting up to $170mn, the SBP reserves on December 28 2018 came down to $7.287bn and that of commercial banks to $6.550bn level.

The cumulative foreign exchange reserves in the country are currently at $13.837bn, 2.28% less than the reserves of $14.017bn on December 21.

Pakistan is struggling to meet its debt-service requirements and is facing a balance-of-payments crisis which has resulted in a rapid decline of the reserves.

However, the situation is expected to improve soon as a $1bn tranche from Saudi Arabia is likely to be released by the end of this month.

Finance ministry, during a briefing to Senate’s Standing Committee on Finance on Thursday, had informed the house that the promised funds from Saudi Arabia are expected to be deposited with the SBP towards the end of January.

In another development on January 2, China confirmed the Financial Times story that said the Asian giant would soon provide Pakistan with $2bn in financial aid to support its economy.

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