Pakistan’s foreign reserves dip down to three-year lowest

KARACHI: Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) continued to fall for the third week in a row, declining by 3.83%.

On October 7, the foreign currency reserves held by the SBP were recorded at $7,596.9 million, down $303 million compared with $7,899.8 on September 30, data released by SBP showed on Thursday.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13,246.8 million.

Total liquid foreign #reserves held by the country stood at US$ 13.25 billion as of October 07, 2022. For details: https://t.co/WpSgomnKT3 pic.twitter.com/QpW5otB7rj

— SBP (@StateBank_Pak) October 13, 2022

Net reserves held by banks amounted to $5,649.9 million. The central bank cited external debt repayment, including interest payments on Eurobonds and repayment of a commercial loan, as a major reason behind the decline.

With the current foreign exchange reserves position, Pakistan has an import cover of fewer than 1.09 months.

The drop in inflows changed sentiment in the interbank market and encouraged importers to buy dollars at the prevailing rate before it became expensive.