Higher imports and external debt payments continue to take a toll on Pakistan’s foreign exchange reserves.
According to data released by the State Bank of Pakistan, the total liquid foreign reserves held by the central bank and commercial banks stood at $ 16.38 billion as of May 6. Of these reserves, net reserves held by commercial banks amounted to $6,067 million.
However, the foreign exchange reserves held by the central bank decreased 1.8 per cent on a weekly basis and were recorded at $10,308.7 million, down $190 million as compared to $10,499 million held by the SBP on April 30.
According to the SBP, the decrease came due to external debt repayments.
On August 27, 2021, the foreign exchange reserves of the SBP soared to an all-time high of $20.15 billion after Pakistan received a general allocation of Special Drawing Rights (SDRs) worth $2,751.8 million from the IMF on August 24.
According to a leading newspaper, on March 30, 2021, Pakistan borrowed $2.5 billion through Eurobonds by offering lucrative interest rates to lenders aimed at building foreign exchange reserves. It received the first loan tranche of $991.4 million from the IMF on July 9, 2019, which helped bolster the reserves. In late December 2019, the IMF released the second loan tranche of around $454 million. The reserves also jumped on account of $2.5 billion in inflows from China. In 2020, the SBP successfully made foreign debt repayment of over $1 billion on the maturity of Sukuk.