KARACHI: The foreign exchange reserves held by the State Bank of Pakistan (SBP) reached almost nine years low level due to slow foreign inflows and continued external debt servicing.

According to the weekly report issued on Thursday, the SBP’s foreign exchange reserves further declined by $245 million during the last week.

Foreign exchange reserves held by the SBP declined to $5.577 billion as on Dec 30, 2022 compared to $5.822 billion as of Dec 23, 2022. The decline in the reserves is due to external debt repayments, the SBP said.

Analyst said that current Level of SBP’s foreign exchange reserves is lowest since April 2014. In addition with current decline, the SBP’s reserves are also even now lower than commercial banks.

Forex reserves to be propelled by ‘friends’: Dar

Similarly, net foreign exchange reserves held by the commercial banks also witness downward trend during the week under review. Reserves held by the banks fell to $5.846 billion end of the last week compared to $5.885 billion a week earlier, depicting a decrease of $39 million.

The country’s total liquid foreign exchange reserves stood at $11.422 billion as on Dec 30, 2022 down from $11.707 billion as on Dec 23, 2022.

The government is making efforts to overcome from ongoing crisis and in contact with several multinational financial institution and friendly countries to get some deposit to avoid default risk.

In addition, the government has imposed a number of restrictions to contain the country’s import bill.

Federal Minister Finance Ishaq Dar has recently claimed that a number of friendly countries have assured their support to build the depleting foreign exchange reserves of the country and by end June reserves will be at much better level.

According to minister finance, the government is also committed to complete the IMF programme.

Economists said the current level of foreign exchange reserves was sufficient for the imports of almost one months and there was need to make more efforts to build the country’s foreign exchange reserves.

Copyright Business Recorder, 2023