SBP's reserves slip below $11 billion

The State Bank of Pakistan's foreign exchange reserves reached below $11 billion, mainly due to massive external debt payment.

Reserves held by the SBP are on decline for last one month due to continued outflow of foreign investment in the government debt securities. Foreign investors divested some $2.359 billion out of some $3.41 billion investment arrived in government of Pakistan Treasury Bills during this fiscal year (FY20). Most of the amount was withdrawn during March after the COVID-19 pandemic and policy rate cut by the SBP's monetary policy committee.

According to weekly foreign exchange report issued Thursday, during last week, the SBP's reserves further decreased by $463 million to reach $10.723 billion on April 3, 2020 down from $11.186 billion on March 27, 2020. This decline has been attributed to external debt payments of $465 million, the SBP said.

Earlier in March, SBP's reserves had already posted a sharp decline of over $1.6 billion from $12.757 billion to $11.186 billion because of hot money outflow.

Meanwhile during the last week, reserves held by banks were increased by $63 million to $6.266 billion end of last week. Overall, the country's total liquid foreign reserves country stood at $16.988 billion as on April 3, 2020 compared to $17.388 billion a week earlier, showing a decline of $400 million in a week.