Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased $354 million, clocking in at $4.2 billion as of March 24, data released on Thursday showed.

This is the first decline in central bank-held reserves on a weekly basis after six successive increases. The overall number stands at a critical level at around a month of import cover.

Total liquid foreign reserves held by the country stood at $9.8 billion. Net foreign reserves held by commercial banks clocked in at $5.6 billion.

“During the week ended on March 24, 2023, SBP’s reserves decreased by $354 million to $4,244.3 million due to external debt repayment,” said a statement from SBP.

Last week, SBP’s reserves increased $280 million to $4.6 billion.

Earlier during the month, Pakistan received the second disbursement of $500 million from the Industrial and Commercial Bank of China (ICBC).

Cumulatively, Pakistan has received $1.7 billion from Chinese institutions with another $300 million expected.

Moreover, China is working on a request by Pakistan to roll over a $2-billion loan that matured last week.

However, the critical International Monetary Fund (IMF) programme remains stalled as talks continue after Pakistan announced a new fuel subsidy.

A delay in an agreement with IMF is taking a toll on the economy, particularly the rupee.

A shortage of foreign currency reserves has added pressure on the economy that relies heavily on imports to run its engines. While the SBP has put some curbs on inward shipments, reducing the current account deficit in the process, many businesses have been forced to either shut down or scale back operations as policymakers scramble to arrange dollar inflow.