SBP’s forex reserves plunge to 9-year low of $3.68 billion

KARACHI: The official foreign exchange reserves of the State Bank of Pakistan (SBP) fell sharply to an almost nine-year low of $3.68 billion by the week ended January 20, 2023.

The SBP on Thursday said that its reserves fell $923 million to $3.678 billion by the week ended January 20, 2023, compared with $4.601 billion on January 13, 2023.

Previously, the official forex reserves of the SBP were seen at this level at $3.87 billion in February 2014.

The central bank attributed the decline in the foreign exchange reserves to scheduled external repayments.

The current level of the official reserves fell below one month’s import cover.

The import bill of the country for December 2022 was recorded at $5.16 billion, according to the Pakistan Bureau of Statistics (PBS). The benchmark foreign exchange reserves of a central bank should be at a level to provide three months import cover.

The foreign exchange reserves held by the central bank witnessed a record high of $20.146 billion by the week ended August 27, 2021. Since then, the official forex reserves of the SBP dropped by $16.468 billion.

The foreign exchange reserves of the country recorded a decline of $990 million to $9.453 billion by the week ended January 20, 2023, compared with $10.443 billion by the week ended January 13, 2023.

The country’s foreign exchange reserves hit the all-time high of $27.228 billion on August 27, 2021. Since then, these have declined by $17.775 billion.

The foreign exchange reserves of the commercial banks also fell $67 million to $5.775 billion by the week ended January 20, 2023, compared with January 13, 2023.

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