Karachi, February 22, 2024 – Pakistan’s foreign exchange reserves experienced a weekly dip of $51 million, according to the State Bank of Pakistan (SBP) announcement on Thursday.
The reserves for the week ending February 16, 2024, were recorded at $13.098 billion, compared to $13.149 billion the previous week (February 9, 2024).
While the decline is notable, it’s important to highlight that these figures still fall short of the robust levels observed in August 2021.
Breaking down the data, the official reserves held by the State Bank decreased by $43 million, reaching $8.013 billion for the week ending February 16, 2024, compared to $8.056 billion the week prior. The SBP attributed this decline to foreign debt repayments by the federal government.
Similarly, the foreign exchange reserves held by commercial banks experienced a nominal decrease of $8 million, amounting to $5.085 billion for the week ending February 16, 2024, in comparison to $5.093 billion the previous week.
The decline in weekly forex reserves raises awareness about the country’s fiscal position and its ability to meet external payment obligations. Despite the dip, the current levels remain a far cry from the robust figures witnessed in August 2021, suggesting ongoing challenges and the need for prudent fiscal management.
The SBP’s clarification attributing the decline to foreign debt repayments by the federal government underscores the importance of managing external liabilities and navigating the complex landscape of international finances.
As Pakistan grapples with economic challenges, monitoring forex reserves becomes crucial for assessing the country’s financial health. Adequate reserves are essential for meeting external payment obligations, maintaining currency stability, and withstanding unforeseen economic shocks.
While the decline in forex reserves is a concern, it’s imperative to consider broader economic indicators and policy measures. Authorities may need to carefully balance debt repayment commitments with efforts to bolster reserves through various means, such as promoting exports, attracting foreign investment, and implementing effective monetary policies.
The coming weeks will likely see increased attention on Pakistan’s economic strategies as stakeholders assess the impact of this decline in forex reserves. Policymakers may need to navigate these challenges with a strategic approach to ensure the country’s financial resilience and long-term stability.
