Pakistan Records $59 Million Drop in Weekly Forex Reserves

Pakistan Records $59 Million Drop in Weekly Forex Reserves

Karachi, February 29, 2024 – The State Bank of Pakistan (SBP) reported a significant drop of $59 million in the country’s weekly foreign exchange reserves on Thursday.

As of the week ending February 23, 2024, the total exchange reserves of Pakistan stood at $13.039 billion, compared to $13.098 billion the previous week (February 16, 2024).

Although this decline is noteworthy, it is crucial to recognize that these figures, while indicating a decrease, still remain above the levels observed in August 2021 when the country faced a different economic scenario.

The official foreign exchange reserves of the State Bank of Pakistan experienced a decrease of $63 million, settling at $7.95 billion for the week ending February 23, 2024. This is a notable decline from $8.013 billion recorded a week earlier. The State Bank of Pakistan attributed this reduction in reserves to the government’s external debt repayments.

Pakistan has been facing economic challenges, and the impact of external debt repayments on foreign exchange reserves adds a layer of complexity to the financial landscape. The government’s commitment to meeting its debt obligations may have contributed to the decrease in reserves but reflects responsible financial management.

On a positive note, the foreign exchange held by commercial banks showed a modest increase. The reserves held by commercial banks rose by $4, reaching $5.089 billion for the week ending February 23, 2024, compared to $5.085 billion the previous week. This slight uptick suggests resilience in the banking sector despite the overall decrease in the country’s foreign exchange reserves.

The State Bank of Pakistan, in its statement, emphasized the importance of addressing the challenges posed by external debt obligations while also focusing on measures to strengthen the country’s overall economic stability. Efforts to diversify revenue streams, attract foreign investment, and implement sound economic policies may be essential in navigating the current economic landscape.

While the drop in foreign exchange reserves is a concern, policymakers and financial institutions must work collaboratively to mitigate potential risks and ensure sustainable economic growth. It is crucial for Pakistan to maintain a balance between meeting its financial obligations and implementing strategies that foster long-term economic resilience.

As the global economic landscape continues to evolve, Pakistan, like many other nations, faces ongoing challenges. The coming weeks will be crucial in observing how the government and financial institutions respond to these economic shifts and work towards securing the nation’s financial stability in the long run.