KARACHI: The country’s total liquid foreign exchange reserves further fell by $711 million during last week due to external debt servicing. According to weekly report issued by the State Bank of Pakistan, the total liquid forex reserves held by the country stood at $8.742 billion as of Jan 27, 2023 compared to $9.453 billion on Jan 20, 2023.

During the week under review, the SBP’s reserves decreased by $592 million to $3.086 billion by the end of last week, down from $ 3.678 billion a week earlier. The SBP’s reserves fell due to external debt repayments. The SBP’s reserves can cover almost 20-day imports of the country.

Net forex reserves held by commercial banks also witnessed a downward trend and declined by $119.3 million to $5.656 billion end of the last week.

Alarm bells: SBP-held foreign exchange reserves plunge $923mn, now stand at mere $3.7bn

Cumulatively, the country’s total liquid forex reserves fell sharply by about $1.7 billion during last two weeks due to continued debt payments and slow foreign inflows.

During the week ended Jan 20, 2023, the country’s total liquid foreign exchange reserves (including SBP and commercial banks) shrunk by about $1 billion to $9.453 billion.

Analysts said that the ‘crisis’ of foreign exchange reserves may further escalate as the country has to settle some $ 7 billion external debt during next five months.

Although, the federal government is struggling to fetch foreign inflows and the IMF delegation is in Pakistan for 9th review of Extended Fund Facility (EFF) programme to release the next tranche.

The release of the IMF tranche will help get foreign exchange inflows from other international financial institutions and friendly countries.

Copyright Business Recorder, 2023