KARACHI: According to the State Bank of Pakistan (SBP), Pakistan’s foreign exchange reserves have risen to $10.14 billion as of the week ending on March 17, 2023.
The central bank reported that the country’s foreign exchange reserves for the week increased by $292 million compared to the previous week, which was $9.847 billion as of March 10, 2023.
READ MORE: Pakistan’s weekly forex reserves move up by $93 million
As of August 27, 2021, the foreign exchange reserves of the country reached an unprecedented high of $27.228 billion. However, since then, the foreign exchange reserves have declined by $17.089 billion.
On the other hand, the State Bank of Pakistan’s official reserves increased by $280 million to $4.599 billion as of the week ending on March 17, 2023, in comparison to $4.319 billion from the previous week.
The State Bank of Pakistan’s foreign exchange reserves have now exceeded a level that provides more than one month’s import cover.
READ MORE: SBP’s forex reserves rise more than one month import cover
The recorded import bill of the country for the month of February 2023 was $4 billion. Ideally, a central bank should maintain foreign exchange reserves that are equivalent to three months’ worth of import payments by the country.
As of the week ending on August 27, 2021, the central bank’s foreign exchange reserves reached a historic high of $20.146 billion. However, since then, the State Bank of Pakistan’s official reserves have declined by $15.547 billion.
READ MORE: SBP’s weekly forex reserves up by $556 million
The SBP attributed the initial increase in reserves to a $500 million commercial loan disbursement received from the Government of Pakistan.
In addition, the foreign exchange reserves of commercial banks increased by $12 million to $5.54 billion as of the week ending on March 17, 2023, compared to $5.528 billion from the previous week.
Pakistan is currently experiencing a significant shortage of foreign exchange to sustain its balance of payments.
READ MORE: SBP’s foreign exchange reserves inch up to reach $3.26 billion
The government is working diligently to negotiate a deal with the International Monetary Fund (IMF) in order to secure a tranche of $1.2 billion under the Extended Fund Facility (EFF).
However, there has been a positive development in the form of substantial foreign inflows received from China, which has helped to improve the country’s stock of foreign exchange reserves.
