Pakistan's foreign reserves slumped over 4%- touches ground in the past four years

LAHORE: State Bank of Pakistan (SBP), has declared the most recent statistics of foreign reserves showing descending trend in the past four years, the reserves have fallen to the lowest level of 4.39 percent on weekly basis.

According to sources, on 13th July, SBP had $9,063.6 million as foreign currency reserves, which is almost $415.9 million less comparatively to last week’s amount of $9,479.5 million.

The net reserves in commercial banks are around $6,618.9 million, and total liquid foreign reserves consisting of net reserves in commercial banks apprehended by Pakistan are of amount $15,682.5 million.

April data reveals that SBP reserves were increased by $593 million as executive inflows were amplified. Pakistan also elevated $2.5 billion in the month of November 2017 due to balancing of dollar-denominated bonds in the international market. Moreover, Pakistan acknowledged $622 million from the Asian Development Bank (ADB), $106 million from the World Bank and $350 million from Coalition Support Fund (CSF).

According to report, a loan of $500 million is returned by SBP to State Administration of Foreign Exchange (SAFE), China. Mainly SBP stresses on the fact that external liabilities are the reason behind falling of foreign reserves, but as per SBP release there is no such fact highlighted for decline at this time.

Presently, Pakistan can only afford to cover 1.5 months of imported goods, meanwhile there are many debt compulsions that are to be taken care as import bills are increasing on regular basis.

Furthermore, SBP is continuously depreciating Pakistani rupee against US dollar, it’s the fourth time since December 2017 that rupee has lost its value. On Thursday, its traded at Rs128.60 highlighting a total drop down of about 22% since December 2017. This has created pressure on the import bills, as its almost $6 billion on monthly basis.

It is also stated in SBP release, rate of return expected for acceptance is about 7.53% per annum of Rs1.268 billion injected into money market on Thursday for next eight days by SBP as reverse repo purchase through its open market operation.