KARACHI: Official foreign exchange reserves of State Bank of Pakistan (SBP) fell to only $4.34 billion by week ended January 06, 2023, according to a statement issued on Thursday.
The SBP’s reserves fell by $1.233 billion from the level of $5.576 billion a week ago i.e. December 30, 2022.
The present level of the official reserves have fallen below one month import cover.
READ MORE: Pakistan’s total forex reserves further deplete to $11.42 billion
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).
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 $16.803 billion.
READ MORE: Pakistan’s official forex reserves fall to alarming level of $5.82 billion
The total foreign exchange of the country also fell by $1.234 billion to $10.188 billion by week ended January 06, 2023 as compared with $11.422 billion a week ago.
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 $17.04 billion.
The foreign exchange reserves held by commercial banks were remained flat at $5.845 billion by week ended January 06, 2023 as compared with $5.846 billion a week ago.
READ MORE: Pakistan’s official forex reserves plummet to about one month import cover
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).
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, according to the analysts.
READ MORE: Pakistan foreign exchange reserves ease to $12.57 billion
