Karachi, June 15, 2023: Pakistan’s foreign exchange reserves saw a modest increase of $43 million for the week ending June 9, 2023, according to the State Bank of Pakistan (SBP).
The country’s total foreign exchange reserves rose to $9.378 billion compared to $9.335 billion the previous week, which was June 2, 2023.
READ MORE: SBP’s Foreign Exchange Reserves Plummet to $3.912 Billion, Below One-Month Import Cover
The SBP’s official foreign exchange reserves recorded a gain of $107 million, reaching $4.019 billion by the week ended June 9, 2023, compared to $3.912 billion a week earlier.
However, the current level of foreign exchange reserves held by the SBP remains below the equivalent of one month’s worth of the country’s import bill. In May 2023, Pakistan’s import bill amounted to $4.275 billion, as reported by the Pakistan Bureau of Statistics (PBS). According to international standards, central banks are expected to maintain foreign exchange reserves equivalent to at least three months’ worth of import cover.
The import bill for May 2023 witnessed a significant increase of 43 percent compared to $3 billion in April 2023. This surge was primarily attributed to the government’s decision to lift restrictions on opening Letters of Credit (LCs) for import payments.
Pakistan is eager to resume its IMF program to attract foreign inflows and bolster its foreign exchange reserves. The country recognizes the importance of increasing its reserves to ensure stability in the economy and meet its international obligations.
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The slight increase in foreign exchange reserves is a positive development, but sustained efforts are required to strengthen the reserves and achieve a more robust position, aligning with international benchmarks and promoting financial stability in the country.
