SBP reserves diminished by $136m in a week

December 21, 2023 (MLN): The foreign exchange reserves held by the State Bank of Pakistan (SBP) fell by $136 million or 1.93% WoW to $6.905 billion during the week ended on December 15, 2023, according to the data released by the central bank on Thursday.

Similarly, the country's total reserves declined by $138m or 1.131% WoW to $12.07bn.

The reserves held by commercial banks inched down by $2m or 0.04% WoW to $5.164bn.

In a recent development, Pakistan secured initial approval from the International Monetary Fund (IMF) for the release of the next loan tranche under the current $3bn loan program.

Pending approval by the IMF's Executive Board, the agreement will grant Pakistan access to SDR 528m, which is around $700m.

To note, towards the end of FY23, the IMF being a last resort saved Pakistan from a sovereign debt default with a $3bn Stand-by Arrangement (SBA).

The initial disbursement of $1.2bn from the IMF, alongside $3bn bilateral inflows from the Arab countries gave a substantial boost to the depleting foreign reserves held by the country.

Consequently, in the current fiscal year, total liquid foreign reserves have increased by $2.908bn or 31.75%.

However, ever since the boost from the IMF and the Arab countries, fresh inflows seem to have dried up, with the total reserves slowly depleting almost every week.

Meanwhile, the current calendar year has seen an increase of $1.223bn or 11.28%.

Amount in USD Million

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