Rupee falls despite rise in SBP forex reserves

Foreign exchange reserves of the State Bank of Pakistan (SBP) have increased to $4.3 billion after the inflows of $500 million from China, but the currency market reacted negatively as the dollar appreciated by more than Rs3 in the interbank on Thursday. The SBP reported that its reserves increased by $487m during the week ended on March 3 to $4.301bn. The total liquid foreign reserves held by the country stood at $9.754bn. The central bank’s reserves have witnessed a steep fall over the past year, falling from more than $17bn in February 2022 to below $3bn in early February this year. However, the reserves have now edged higher to $4.3bn on the back of recent Chinese help of $1.2bn. No other country has moved forward so far to help Pakistan to improve its reserves, as the government has been struggling to resume a stalled IMF bailout package.