Pakistan’s central bank reserves shrink to one month import cover

Pakistan’s central bank reserves shrink to one month import cover

KARACHI: The official reserves of Pakistan’s central bank have declined to provide about one month import cover, according to official data released on Thursday.

The official foreign exchange reserves of the State Bank of Pakistan (SBP) fell by $241 million to $8.985 billion by week ended June 10, 2022 as compared with $9.226 billion a week ago i.e. June 03, 2022.

READ MORE: SBP’s forex reserves slip 2½-year low to $9.226 billion

The present level of the SBP’s reserves showed that the central bank has import cover for around only one months.

Pakistan’s import bill for the month of May 2022 recorded at $6.777 billion, according to Pakistan Bureau of Statistics (PBS).

The latest foreign exchange reserves of the SBP showed it fell around 2½ years low. Previously, the foreign exchange reserves held by the central bank were seen at $9.233 billion on December 6, 2019.

The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021.

READ MORE: SBP’s forex reserves fall two-year low to $9.72 billion

Since touching the peak the central bank’s foreign exchange witnessed a continuous decline. The official reserves of the SBP fell around $11.16 billion by week ended June 10, 2022 from touching the peak on August 27, 2021.

The country is facing serious balance of payment crisis during the past many months. The foreign exchange reserves of the central bank have seen a constant decline.

The falling foreign exchange reserves also put pressure on the local currency. The Pakistani Rupee (PKR) is also depreciating to record low against the US dollar on daily basis.

The rupee fell to a fresh historic low at Rs207.67 to the dollar at interbank foreign exchange closing on June 16, 2022.

READ MORE: Moody’s changes Pakistan’s outlook to negative

The country was expecting inflows from various sources but so far those were not materialized so far. The country also making all efforts to resume IMF program to obtain about $ 1 billion next tranche under Extended Fund Facility (EFF).

The total foreign exchange reserves of Pakistan have declined to around three-year low at $14.94 billion by week ended June 10, 2022. Previously, the foreign exchange reserves of the country were seen at $14.86 billion by week ended July 19, 2019.

The country’s foreign exchange reserves have fallen by $233 million to $14.943 billion by week ended June 10, 2022 as compared with $15.176 billion a week ago i.e. June 03, 2022.

READ MORE: Pakistan’s headline inflation up by 13.8% in May 2022

The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $12.285 billion.

The foreign exchange held by commercial banks however slightly up by $8 million to $5.958 billion by week ended June 10, 2022 as compared with $9.226 billion a week ago.

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