Nine year low: SBP’s forex reserves fall below $3b

In an alarming sign for the national economy, the country’s foreign exchange reserves have fallen to a nine-year-low.

According to data released by the State Bank of Pakistan (SBP) on Thursday evening, the country’s foreign exchange reserves for the wee ending February 03, 2023, fell to $8.540 billion.

The central bank said that the reserves fell by $170 million over the past week due to external debt payments.

This was the lowest level for national reserves since March 2014 when reserves fell to $7.638 billion.

The biggest impact of debt repayments, however, came on the reserves held with the central bank which shrunk below the $3 billion level, falling to $2.917 billion.

This was the lowest level for reserves held with the central bank for nine years. For the week ending February 7, 2014, SBP’s reserves had shrunk to $2.841 billion. Total reserves held by the country for that week was $7.59 billion with around $4.478 billion held by commercial banks.

The SBP data showed that for the week ending February 03, 2023, reserves held by commercial banks shrunk fractionally by $32.6 million to $5.623 billion.

Experts said that these reserves were only sufficient to cover 0.58% of a month’s imports, or for around 17 days.