Karachi, November 7, 2024 – Pakistan’s foreign exchange (forex) reserves have witnessed a decline of $117 million by the week ended November 1, 2024, according to a report from the State Bank of Pakistan (SBP) on Thursday.
The latest decline brings Pakistan’s total liquid forex reserves to $15.932 billion, down from $16.049 billion recorded on October 25, 2024.
The recent decrease in Pakistan’s forex reserves is attributed to several economic factors, including fluctuating exchange rates, repayment obligations, and increased demand for imports. Despite these challenges, the official forex reserves held by the SBP saw a slight increase of $19 million, rising to $11.175 billion by the end of the week, compared to $11.156 billion a week earlier. This modest gain in the SBP reserves suggests a strategic effort by Pakistan’s central bank to stabilize reserve levels amidst economic pressures.
However, the forex reserves held by Pakistan’s commercial banks recorded a sharper decline. Commercial bank reserves fell by $136 million to settle at $4.757 billion by November 1, 2024, from $4.893 billion the previous week. This reduction in commercial bank reserves highlights the impact of market pressures on private banking institutions, which have been grappling with demand for foreign currency amid the economic environment.
Pakistan’s forex reserves play a crucial role in stabilizing the economy and maintaining the country’s ability to engage in international trade. Adequate reserve levels are essential for meeting foreign debt obligations and supporting imports of essential goods. The current decline, therefore, signals potential challenges that may impact Pakistan’s economic outlook if reserves continue to dip.
The government of Pakistan has been making efforts to address the reserve situation, including policies to curb unnecessary imports and promote export growth. Additionally, Pakistan has been negotiating with international financial institutions for assistance to bolster reserves and support economic recovery.
The SBP’s weekly report on reserves is closely monitored as an indicator of Pakistan’s financial health. As the economy continues to face external and internal pressures, the management of forex reserves remains a critical area for Pakistan’s policymakers in their efforts to maintain stability and support economic resilience.
