FX reserves drop by $275mn

December 3, 2021 (MLN): Foreign exchange reserves held by the country declined by 1.21% or $275 million to stand at $22.50 billion during the week ended on November 26, 2021, weekly data released by the State Bank of Pakistan (SBP) showed on Thursday.

Similarly, foreign exchange reserves held by the SBP fell by $243m to $16.01bn. On the other hand, reserves held by the commercial banks also decreased by $31.20mn during the week under review to $6.49bn.

The depleting forex reserves will hardly cover this soaring merchandise import bill for around three months if it continues to report the same for the next months. It is pertinent to note that the country witnessed an all-time high import of $7.847bn in November 2021.

With the fall in reserves in the background, the Pakistani rupee is currently trading at 176.90 [10:37 PST] against the greenback, depreciating by 48 paisa in an interbank market.

Given the depleting reserves, record-high imports and sliding PKR, the analyst fraternity is expecting another hike of over 100 bps in the upcoming MPC meeting.

Meanwhile, in response to queries from the media, the central bank has clarified that the date of the next MPC meeting is not being brought forward. It is scheduled to take place on Dec 14, as previously announced.

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