Foreign exchange reserves continue to plunge

A representative image of the US dollar. —Reuters
  • Reserves fell by more than 4% to $8,005.9 million.
  • The central bank says the decline is due to external debt payments.
  • Net reserves held by banks amounted to $5,756 million.

KARACHI: In line with the prevailing trend in recent weeks, the country’s foreign exchange reserves held by the State Bank of Pakistan (SBP) declined again by 4.07%.

On Sept. 23, foreign exchange reserves held by the SBP were recorded at $8,005.9 million, down $341 million from $8,346.4 million on Sept. 16, according to data released by the SBP on Thursday.

The overall liquid foreign exchange reserves held by the country, including net reserves held by banks other than SBP, amounted to $13,761.9 million.

Net reserves held by banks amounted to $5,756 million. The central bank cited foreign debt repayment as one of the main reasons for the decline.

With the current position of foreign exchange reserves, Pakistan has an import cover of less than two months.

A critical level of reserves caused heavy pressure on the Pakistani rupee, with the local unit becoming the worst performing currency this month.

The rupee gained ground as Ishaq Dar took office as the new finance minister, a development that helped the foreign exchange market recover.

The rupee was on the cusp of a new all-time low; however, Dar’s arrival gave the market much-needed clarity.

The Pakistani rupee appreciated for the 5th consecutive session on Thursday and closed at 229.62.