SBP foreign exchange reserves plummet by $386m over a single week

Foreign exchange reserves held by the State Bank of Pakistan (SBP) have taken a considerable hit. According to data recently released by the central bank, its foreign currency reserves fell by 2.88% as compared to last week, or by a sum of $386 million.

As reported by The Express Tribune, the SBP released data on its foreign exchange reserves on Thursday. The data revealed that on January 15, foreign currency reserves held by the central bank amounted to $13,013.8 million, which represents a drop of $386 million compared to the previous week’s total of $13,400 million.

According to the SBP, the plunge in reserves has been caused by external debt repayments over the past couple of weeks. Overall, liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $20,120.3 million. Net reserves held by banks amounted to $7,106.5 million.

Pakistan received the first loan tranche of $991.4 million from the International Monetary Fund (IMF) on July 9, 2019, which helped bolster the reserves. In late December 2019, the IMF released the second loan tranche of around $454 million.

The reserves also jumped on account of $2.5 billion in inflows from China. In 2020, the SBP successfully made foreign debt repayment of over $1 billion on the maturity of Sukuk.

In December 2019, the foreign exchange reserves surpassed the $10 billion mark owing to inflows from multilateral lenders including $1.3 billion from the Asian Development Bank (ADB).