SBP’s foreign exchange reserves fall to $3.09bn

KARACHI: The foreign exchange reserves held by the State Bank of Pakistan (SBP) declined $592 million to $3.09 billion in a week, according to data released by the central bank on Thursday.

The total liquid foreign reserves of Pakistan stood at $8.74 billion, whereas, the net foreign reserves held by commercial banks stood at $5.65 billion.

The drop of $592 million was witnessed due to external debt repayments, according to the central bank.

Total liquid foreign #reserves held by the country stood at US$ 8.74 billion as of January 27, 2023.
For details https://t.co/WpSgomnKT3 pic.twitter.com/LE9eay1XU2

— SBP (@StateBank_Pak) February 2, 2023

In December, State Bank of Pakistan (SBP) Governor Jameel Ahmad had asserted that all debt repayments were on track while the country’s foreign exchange reserves are expected to increase in second half of the current fiscal year.

READ: SBP’S FOREIGN EXCHANGE RESERVES PLUNGE TO $3.7 BILLION

In a statement, Governor SBP noted that for the fiscal year 2023, around $33 billion were to be repaid to external stakeholders, including the Current Account Deficit (CAD) of $10 billion and $23 billion in loan repayments.

Out of the payable $23 billion external debt, Pakistan has already repaid more than $6 billion whereas as a bilateral loan of $4 billion has been rolled over with the cooperation of relevant countries.

“Another $8.3 billion maturing obligations are expected to be rolled over as discussions are underway,” he said, adding that the remaining outstanding repayment stands around $4.7 billion for the remainder of this fiscal year.

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He said, Pakistan has received foreign exchange inflows of $4 billion (excluding the rollovers of $4 billion mentioned above). “Pakistan will continue to make timely loans payments while inflows are expected to increase significantly in the second half of the current fiscal year,” he added.

Along with the rollover of some external obligations, Pakistan’s foreign exchange reserves are expected to increase significantly in the coming months.

He said the debt profile of Pakistan was composed of bilateral and multilateral creditors and only a small percentage is owed to foreign banks. “SBP has enough reserves to repay all obligations in an effective manner and the inflows expected will boost forex reserves”.