SBP reserves decrease by $583.8mn to $6.12bn

December 22, 2022 (MLN): Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by $583.8million to $6.12 billion during the week ended on December 22, 2022, according to the data released by the Central bank on Thursday.

This is the lowest level of forex reserves since April 2014.

Reserves held by the commercial bank slightly moved up by $13.7mn to clock in at $5.88bn.

Meanwhile, the total reserves held by the country plunged by $570.1mn to $12bn.

It is important to note that, the current level of foreign currency reserves is barely enough to cover 1.18 months of import bills.

Earlier today, the Global ratings agency S&P Global has downgraded Pakistan’s long-term sovereign credit rating to “CCC+” from “B” due to high external risk.

However, the country's outlook remained stable.

To note, in November 2022 the inflow of foreign direct investment (FDI) into Pakistan stood at $81.8mn against the inflow of $94.9mn recorded in the previous, went down by 13.7% MoM.

The country's Current Account Deficit (CAD) shrank $276mn in November 2022, down by 51.5% MoM compared to $569mn in October 2022 while on yearly basis, it slumped by 85% YoY.

It is expected that in 2023 Pakistan will remain in pressure due to recent floods, Russia Ukraine war, high energy prices, depleted foreign exchange reserves, less export, rupee depreciation, tighter global financial conditions.

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