Continuing downward trend, Pakistan’s foreign reserves decline further

• Total liquid foreign exchange reserves are at their lowest since January 18, 2019.
• SBP says decline of $748 million in its foreign reserves in outgoing week was due to external debt repayments. 
• Central bank optimistic that reserves held by it are expected to increase in coming days on realisation of proceeds of CDB loan.

KARACHI: Pakistan's total liquid foreign exchange reserves clocked in at $14,210.4 million, down from $14,943 million last week, data from the central bank showed on Thursday. 

The total liquid foreign exchange reserves are at their lowest since January 18, 2019.

The break-up showed that the foreign reserves held by the State Bank of Pakistan are at $8,237.7 million. The SBP said that decline of $748 million in its foreign reserves in the outgoing week was due to external debt repayments. 

As of June 17, 2022, the SBP reserves are the lowest since October 25, 2019, which means that Pakistan has an import cover of only 1.21 months.

Meanwhile, the net foreign reserves held by commercial banks stood at $5,972.7 million.

The central bank said that it was optimistic that reserves held by it are expected to increase in the coming days on the realisation of proceeds of the CDB loan.

The state bank was referring to the announcement made by Finance Minister Miftah Ismail, a day earlier, that Pakistan had signed an RMB 15 billion ($2.3 billion) loan facility agreement with a Chinese consortium of banks which is expected to aid the depleting foreign exchange reserves and depreciation of the local currency.

Ismail announced the development on his Twitter handle, revealing that the inflows are expected within a couple of days.