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Pakistan’s foreign reserves drop to 23-month low

Foreign reserves have reached just $10.308 billion. Source: Pixabay.

KARACHI: Foreign exchange reserves declined by $190 million to $10.308 billion during the week ended on May 6, data released by the State Bank of Pakistan (SBP) showed on Friday.

Pakistan’s foreign exchange reserves dropped to their lowest level since December 2019 at $16.4 billion in the week that ended May 6, from $16.5 billion a week earlier. The central bank reserves fell to a 23-month low.

Net foreign reserves held by commercial banks were US$ 6.067 billion. The foreign exchange reserves of the country were $16.553 billion by week ended April 30, 2022.

After attaining a peak of $20 billion in August 2021, the SBP reserves have dipped due to increasing current account and trade deficits, higher external debt payments and reduced dollar inflows.

The reserves of commercial banks, however, inched up to $6.067 billion from $6.054 billion. Soaring current account and trade deficit, lack of foreign currency inflows, and increasing foreign debt servicing obligations led to the depletion of reserves.

The falling reserves put pressure on the currency as it plunged to an all-time low of 191.77 per dollar in the interbank market.

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