Karachi, October 5, 2023 – Pakistan’s foreign exchange reserves have witnessed a decline, falling to $13.03 billion, as revealed by official data released by the central bank on Thursday.
The State Bank of Pakistan (SBP) reported a decrease of $132 million in the country’s foreign exchange reserves for the week ending September 28, 2023, compared to $13.162 billion in the previous week, ending September 22, 2023.
READ MORE: Pakistan Witnesses Massive 25% Decline in Imports During First Quarter of FY24
It is noteworthy that Pakistan’s foreign exchange reserves are significantly lower than their peak level reached in August 2021 when they stood at a robust $27.2 billion. This substantial decline has raised concerns about Pakistan’s ability to effectively meet its import requirements and maintain stability for the Pakistani rupee in the international currency market.
Specifically, the official reserves held by the SBP saw a decrease of $22 million, declining to $7.615 billion by September 28, 2023, compared to $7.637 billion a week earlier. Simultaneously, the foreign exchange reserves held by commercial banks recorded a significant drop of $110 million, falling to $5.415 billion by the week ending September 28, 2023, in contrast to $5.525 billion a week before.
READ MORE: Inflation in Pakistan Surges to 31.4% in September 2023
The declining foreign exchange reserves present challenges for Pakistan’s external repayments and overall economic stability. However, a recent recovery in the rupee’s value against the US dollar has provided some relief, helping the country manage its external sector position more effectively.
This situation underscores the importance of prudent fiscal and monetary policies, as well as measures to enhance foreign exchange earnings and reduce the trade deficit. Additionally, it emphasizes the significance of attracting foreign investments and maintaining a favorable business environment to boost export earnings and stabilize foreign exchange reserves.
READ MORE: Pakistan Implements Administrative Measures to Ease Inflation
The Pakistani government and relevant authorities will likely continue to monitor the foreign exchange reserves closely and implement strategies to address the challenges posed by this decline. Ensuring a healthy balance of payments and maintaining sufficient foreign exchange reserves remains crucial for the stability and growth of Pakistan’s economy in the face of global economic uncertainties.
READ MORE: Pakistan’s Foreign Exchange Reserves Decline to $13.162 Billion
