KARACHI: The country’s total liquid foreign exchange reserves declined sharply by $778 million during the last week due to external debt payment.

The State Bank of Pakistan on Thursday reported that Pakistan’s foreign exchange reserves fell some 3.30 percent as of April 30 on the back of government of Pakistan commercial loan repayment. With current decline, the country’s total foreign exchange reserves stood at $ 22.743 billion on April 30, 2021 compared to $23.520 billion a week earlier.

As the external loan payment was made from the SBP’s account, the entire drop was also witnessed in the SBP’s reserves. During the week ended April 30, 2021, SBP reserves decreased by $ 830 million to $ 15.598 billion. During the week government of Pakistan commercial loan of $ 1 billion was paid, whose impact on SBP’s reserves was partially offset by official inflows, the SBP said.

Net foreign reserves held by commercial banks slightly increased from $7.092 billion to $ 7.145 billion end of the last week.

Economists said that the country’s foreign exchange reserves may face a further decline as Pakistan has to pay over $3 billion external loans in the last quarter of the current fiscal year.

The country’s forex reserves were rising and jumped to a five-year high of $23 billion in April supported by inflows from Eurobonds, healthy workers’ remittances inflows and financial assistance from multilateral institutions. Pakistan received proceeds of $2.5 billion against issuance of Eurobonds in the international market.

In addition, deposit inflows through Roshan Digital Account (RDA) also contributed some one billion dollars to the rise in the forex reserves.

Earlier in March, Pakistan received a third tranche of some $500 million from the International Monetary Fund's (IMF) under the Extended Fund Facility Programme.

Copyright Business Recorder, 2021