KARACHI: Pakistan’s total foreign exchange reserves continued to deplete and recorded another fall of $284 million to reach at $11.42 billion by week ended December 30, 2022, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were $11.707 billion a week ago or December 23, 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 $15.806 billion.
READ MORE: Pakistan’s official forex reserves fall to alarming level of $5.82 billion
On the other hand, Pakistan’s official foreign exchange reserves have fallen to an alarming level of $5.57 billion by week ended December 30, 2023. The official foreign exchange reserves of the State Bank of Pakistan (SBP) fell by $245 million to $5.577 billion by week ended December 30, 2022 as compared with $5.822 billion a week ago i.e. December 23, 2022.
The present level of the official reserves have created default situation as the country may unable to pay for foreign trade in coming days.
READ MORE: Pakistan’s official forex reserves plummet to about one month import cover
The import bill of the country for the month of December 2022 was recorded at $5.16 billion, according to Pakistan Bureau of Statistics (PBS).
This shows the official foreign exchange reserves of the country have capacity to provide import cover for only 1.2 months. The benchmark foreign exchange reserves of a central bank should be at a level to provide three months import cover.
The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $14.569 billion.
READ MORE: Pakistan foreign exchange reserves ease to $12.57 billion
The foreign exchange reserves held by commercial banks also recorded a decline of $39 million to reach $5.846 billion by week ended December 30, 2022 as compared with $5.885 billion a week ago.
The critical low level of the foreign exchange reserves may further put pressure on the exchange rate, said analysts at KASB Research.
Plummeting foreign exchange reserves amidst high debt servicing obligations will likely exert considerable pressure on the Pak Rupee (PKR).
READ MORE: Pakistan official forex reserves plunge multi years low to $6.72 billion
As per the SBP, REER has again crossed the 100 mark, driven by Pakistan’s high inflation environment.
As debt servicing exerts additional pressure on the PKR, the analysts believed the currency may depreciate to PKR 265 to the US dollar by end of the current fiscal year.
