SBP’s forex reserves fall to near four-year low

The foreign exchange reserves held by the State Bank of Pakistan (SBP) plunged $784 million to a nearly four-year low of $6.72 billion during the week that ended on Dec 2, the central bank said on Thursday. According to the central bank data, the SBP reserves were last recorded below this level during the week ended on Jan 18, 2019, when it had some $6.64bn. Net foreign reserves held by commercial banks now stand at $5.867bn, meaning the country’s total liquid foreign reserves are now $12.58bn. Strengthening the foreign exchange reserves remained the top agenda of the new government since it took the helm in April. However, SBP’s reserves have since dropped by more than $4bn from around $10.9bn at the time. Central bank currently holds $6.72bn, barely enough to cover over one month’s worth of imports Analyst say the falling reserves may make it more difficult for the country to repay foreign loans; the remaining amount of over $6.7bn is just enough to cover over a month’s imports. SBP Governor Jameel Ahmad said in a podcast on Thursday that during the last five months, inflows remained just $4bn but the figure was expected to rise in the second half of the current fiscal year ending June 2023.