Karachi, August 31, 2023 – Pakistan’s foreign exchange reserves have witnessed a decline of $77 million in just one week, according to a statement by the central bank on Thursday.
The State Bank of Pakistan (SBP) reported that the country’s foreign exchange reserves dwindled to $13.171 billion during the week ending August 25, 2023, down from $13.248 billion the previous week, which was August 18, 2023.
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It’s important to highlight that while the current level of foreign exchange reserves reflects a decline, it remains substantially lower than the peak observed in August 2021 when the reserves stood at a robust $27.2 billion. This stark contrast underscores the ongoing challenges Pakistan faces in maintaining a secure economic foundation.
Furthermore, the position of foreign exchange reserves also saw a decrease of $81 million, falling to $7.849 billion by the end of the week on August 25, 2023, compared to $7.93 billion the previous week.
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The foreign exchange reserves held by commercial banks experienced a slight uptick, increasing by $4 million to reach $5.322 billion by the week ending August 25, 2023, compared to $5.318 billion the previous week.
Pakistan currently finds itself in a precarious balance of payment situation, grappling with the need to bolster its foreign exchange reserves. The nation is facing challenges in meeting repayment obligations to foreign lending agencies and ensuring an adequate supply of dollars for essential imports and other corporate payments.
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The declining foreign exchange reserves are expected to further exacerbate the macroeconomic situation in the country, especially as the Pakistani Rupee (PKR) continues its persistent decline against the US dollar, reaching an all-time low of PKR 305.54 on August 31, 2023.
These developments underscore the urgency for Pakistan to implement effective measures to stabilize its foreign exchange reserves and address the broader economic challenges it faces in the global financial landscape.
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