FX reserves fall by a massive $2.9bn on debt repayments

March 31, 2022 (MLN): The total liquid foreign exchange reserves held by the country dropped by a massive $2.885 billion or 13.5% WoW to stand at the lowest level of $18.54billion since June 26, 2020, during the week ended on March 25, 2022, compared to $21.44bn in the previous week, weekly data released by the State Bank of Pakistan (SBP) on Thursday showed.

This mammoth decline reflects repayment of external debt, including repayment of a major syndicated loan facility of around $2.3bn (RMB 15,000 million) from China. The rollover of this syndicated facility is being processed and is expected shortly.

In addition, the payment of $900 million as part of Reko Diq settlement can also lead to the depletion of the country’s dollar reserves this week.

The data further revealed that reserves held by the central bank during the week declined by $2.915bn or 19.5% WoW to clock in at the lowest level of $12.04bn since Oct 9, 2020.

On the other hand, the reserves of commercial banks inched up by $30mn or 0.5% WoW to $6.5bn from $6.47bn in the preceding week.

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