Karachi, June 27, 2024 – Pakistan has recorded a fall of $208 million in foreign exchange reserves for the week ending June 21, 2024, according to the State Bank of Pakistan (SBP).
The total reserves now stand at $14.207 billion, down from $14.415 billion the previous week, which ended on June 14, 2024.
The decrease in reserves is primarily attributed to a significant drop in the official reserves held by the SBP. These reserves fell by $239 million, reaching $8.896 billion as of June 21, compared to $9.135 billion a week earlier. The central bank pointed out that this decline is due to repayments made by the government of Pakistan against foreign loans.
However, the reserves held by commercial banks in Pakistan experienced a slight increase. These reserves rose by $31 million, bringing the total to $5.311 billion for the week ending June 21, up from $5.28 billion the previous week. This rise in commercial bank reserves provided a small counterbalance to the overall decline in the country’s foreign exchange reserves.
The fall in the SBP’s reserves comes amid ongoing economic challenges for Pakistan, including efforts to manage its external debt and secure financial stability. The country has been actively seeking support from international financial institutions and friendly nations to bolster its economic standing. The repayment of foreign loans, while necessary, continues to exert pressure on the country’s reserves.
Economic analysts suggest that the decline in forex reserves could have implications for Pakistan’s financial markets and exchange rates. A decrease in reserves can often lead to increased volatility in the currency market, potentially affecting the Pakistani rupee’s value against other currencies. The central bank’s ability to intervene in the forex market is also influenced by the level of reserves it holds.
Moving forward, the government and the central bank may need to explore additional measures to strengthen the country’s reserves. This could include seeking further international assistance, implementing policies to boost exports, and attracting foreign investments. The focus will likely remain on stabilizing the economy and ensuring that Pakistan can meet its external obligations without depleting its reserves excessively.
As the situation develops, close monitoring of the forex reserves and effective economic management will be crucial for maintaining financial stability in Pakistan.
