KARACHI, May 18, 2020 – The foreign exchange reserves of Pakistan have experienced a decline of $126 million, reaching $18.618 billion by the week ending May 15, 2020, according to a report released by the State Bank of Pakistan (SBP) on Thursday.
The reserves a week earlier stood at $18.744 billion, indicating a notable reduction.
The primary contributor to this decrease was the dip in the foreign exchange reserves held by the State Bank of Pakistan. The SBP’s reserves fell by $141 million, settling at $12.129 billion by the week ending May 15, 2020, compared to $12.27 billion recorded a week earlier. The State Bank of Pakistan cited external debt repayments amounting to $156.1 million as the driving factor behind the decline in foreign exchange reserves during the specified week.
In a detailed breakdown, the report highlighted that external debt repayments played a pivotal role in the reduction of SBP’s reserves. Despite the economic challenges posed by the global scenario, Pakistan fulfilled debt obligations, leading to a temporary setback in foreign exchange reserves.
Contrastingly, the foreign exchange reserves held by commercial banks witnessed a modest increase during the same period. Commercial banks saw their reserves rise by $15 million, reaching $6.489 billion by the week ending May 15, 2020, compared to $6.474 billion a week earlier. This marginal increase in commercial bank reserves may provide a degree of stability to the overall foreign exchange position of the country.
The report did not delve into the specifics of the external debt repayments made during the week. However, it emphasized the importance of monitoring these repayments as a critical factor influencing the country’s foreign exchange reserves.
Pakistan’s economic landscape has been subject to various challenges, including the impact of the global COVID-19 pandemic, which has disrupted economies worldwide. The government and financial institutions are navigating through these challenges, making efforts to ensure financial stability and meet international financial obligations.
The decline in foreign exchange reserves, while relatively moderate, underscores the need for continued vigilance and strategic economic management. Policymakers and financial authorities are likely to closely monitor these indicators to formulate and implement policies that bolster the country’s economic resilience during these uncertain times.
As the global economic landscape continues to evolve, stakeholders will be keenly observing how Pakistan adapts to the dynamic challenges and navigates the path towards economic recovery. The coming weeks and months are crucial for policymakers to devise strategies that address both short-term challenges and contribute to the long-term economic sustainability of the nation.