The State Bank of Pakistan's foreign exchange reserves fell over $1.5 billion during April due to massive and continued external debt servicing. During the week ending March 29, 2019, the SBP received inflows of RMB 15 billion equivalent to $ 2 billion as proceeds of the loan obtained by government of Pakistan from China for balance of payment support. After taking into account the outflow relating to external debt and other official payments, the SBP's reserves increased by $1.93 billion to $10.492 billion at the end of March 2019.
However, in the first week of May 2019, the SBP's reserves reached below $9 billion mark owing to external debt servicing. Cumulatively, the SBP's forex reserves declined $1.508 billion in April 2019 as the reserves held by the SBP stood at $8.984 billion on May 3, 2019 compared to $10.492 billion on March 29, 2019.
During the period under review, reserves held by banks moved up by $82 million to $6.988 billion at the end of last week, up from $6.905 billion in March. According to statistics, during the week ending April 5, 2019, the SBP's reserves decreased by $220 million due to external debt servicing and other official payments. During the second week of April, reserves held by the SBP declined by $1.028 billion, mainly due to principal repayment towards Pakistan Sovereign Bond amounting to $1 billion.
However, during the last week of April, the SBP's reserves surged by $179 million, which was a positive sign. The country's total liquid foreign exchange reserves decreased by $1.425 billion to $15.397 billion in the first week of May down from $17.387 billion by March-end.
Pakistan is facing a balance of payment crisis for the last one year and currently negotiating with the International Monetary Fund (IMF) for a bailout package of $6.5 billion. Pakistan has already received $3 billion from Saudi Arabia and $2 billion from UAE one year placement to build the depleting foreign exchange reserves.
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