Karachi July 14 2022: Foreign exchange reserves held by the State Bank of Pakistan were decreased by USD 99 million on higher debt repayments which is much lower when compared with average reserve declining pace of USD 469 million in last five weeks excluding the one in which country receives reserve payment from Chinese banks, revealed on Thursday by State Bank of Pakistan.
On week ended 24th June 2022, SBP reserves increased to more than USD 10 billion level after proceeds of USD 2,071 million from the Chinese Banks loan amounting to RMB 15 billion (roughly USD 2.3 billion).
After moderating in the previous three months, the current account deficit rose to $1.4 billion in May, on the back of lower exports and remittances partly due to the Eid holiday. Based on PBS data, the trade deficit rose to $4.8 billion in June, more than $1.7 billion higher than its February low. While non-energy imports have continued to moderate in the last three months on the back of curtailment measures by the government and the SBP, this decline has been more than off set by the significant increase in energy imports, which rose from a low of $1.4 billion in February to an estimated record high of $3.7 billion in June. While this partly reflects higher prices, significantly higher volumes of petroleum also played a significant role.
The expected completion of the on-going IMF review will catalyze important additional funding from external sources that will ensure that Pakistan’s external financing needs during FY23 are met. Pressures on the Rupee should then attenuate and SBP’s FX reserves should gradually resume their previous upward trajectory during the course of FY23.
For the week ending July 14, 2022, Reserves held with SBP were decreased by USD 99 million to USD 9.717 billion as per data released by the Central Bank.
At present, SBP reserves stand at the level of USD 9.717 billion as of 14th July 2022 compared to USD 9.816 billion at the end of the week ending 7th July 2022.
During the same period, foreign exchange reserves held by commercial banks decreased by USD 33 million to the level of USD 5.893 billion as of 14th July 2022.
Overall reserves held by the country witnessed a decrease of USD 132 million during the week ended 14th July 2022.
