State Bank of Pakistan’s (SBP) foreign exchange holdings have dropped by another $15 million to an alarming level of $6.7 billion, data released by SBP on Thursday has indicated. This is the lowest level of SBP-held reserves since January 2019.
According to the SBP Pakistan’s total liquid foreign reserves as of December 9, 2022, were $12.57 billion. The total amount of net foreign reserves held by commercial banks was $5.87 billion.
The SBP’s reserves closed at $6.7 billion during the week ending December 9, 2022, according to the central bank.
The SBP’s foreign exchange holdings have decreased by $784 million last week down to $6.715 billion.
Falling reserves have raised concerns about Pakistan’s capacity to pay its debts and raised perceived default risks particularly at a time when the nation has been going through an economic crisis and is still rebuilding from devastating floods that claimed more than 1,700 lives.
SBP has taken a number of administrative steps as a result of the low level to rein in the dollar outflow and slow the rupee’s appreciation versus the US currency.
