Foreign exchange reserves held by the State Bank of Pakistan (SBP) fell $87 million, clocking in at an alarming level of $7.81 billion as of August 19, 2022, as policymakers in the country continued to scramble over securing dollar inflows and provide breathing room to the economy.
Total liquid foreign reserves held by the country stood at $13.52 billion, said the SBP on Thursday. Net foreign reserves held by commercial banks amounted to $5.71 billion.
“During the week ended on August 19, 2022, SBP’s reserves decreased by $87 million to $7,809.9 million,” the SBP said in a statement.
SBP-held foreign exchange reserves rise $67mn, now stand at $7.9bn
The reserves’ position is critical for Pakistan which is desperately seeking dollar inflows to meet its balance-of-payments needs. A low level of reserves caused severe pressure on its currency market with the rupee witnessing its worst monthly performance in July in over 50 years.
Since then, the rupee has gained on grounds that Pakistan met all prior conditions of the International Monetary Fund (IMF), a development that would help it secure $1.17 billion of inflow under the Extended Fund Facility (EFF). Additionally, an official source in Abu Dhabi also emphasised the UAE's intention to invest $1 billion in Pakistani companies in various economic and investment sectors.
It also required a combination of an improvement in Pakistan’s trade deficit and realisation of export proceeds to halt a slide that saw the rupee close in on the 240 level in the inter-bank market.
The Pakistani rupee closed near the 219.41 level on Thursday following a depreciation of Rs1.03 or 0.47%.
The decline came despite reports that the Qatar Investment Authority, one of the world’s largest sovereign funds, is considering investing $3 billion in Pakistan. The move would lend support to the South Asian nation’s cash-strapped economy.
Qatar’s sovereign wealth fund aims to invest $3bn
Moreover, Saudi Arabia has also announced to invest an amount of $1 billion, in confirmation of the Kingdom's position in support of the economy of Pakistan, reported the Saudi Press Agency on Thursday.