Foreign exchange reserves held by the State Bank of Pakistan (SBP) dipped $278 million, clocking in at $8.35 billion as of September 16, 2022, according to data released on Thursday.

Total liquid foreign reserves held by the country stood at $14.07 billion, said the SBP on Thursday. Net foreign reserves held by commercial banks amounted to $5.72 billion.

“During the week ended on September 16, 2022, SBP’s reserves decreased by $278 million to $8,346.4 million due to external debt repayment,” said the SBP.

SBP-held foreign exchange reserves decline $176mn to $8.62bn

Earlier this month, SBP's reserves increased as the central bank received the $1.2-billion tranche from the International Monetary Fund (IMF).

Later, the Saudi Development Fund also rolled over a $3-billion deposit with the SBP, an amount that was due to mature in December 2022. However, this development was not meant to increase foreign exchange as the amount was already part of SBP's reserves.

The reserves’ position is critical for Pakistan that has been desperately seeking dollar inflows to meet its balance-of-payments needs.

A low level of reserves has caused severe pressure on its currency market with the rupee witnessing its worst monthly performance in July in over 50 years. The rupee gained some ground as Pakistan met all prior conditions of the IMF, a development that helped it secure $1.17 billion of inflow under the Extended Fund Facility (EFF), but came under pressure once again as floods hit and import restrictions eased.

The local currency is currently hovering near its all-time low as funding expected from friendly countries has not materialised yet.

The Pakistani rupee depreciated for the 15th consecutive session on Thursday and closed at 239.71.