Karachi October 13 2022: SBP foreign exchange reserves for the week ending October 7 2022, were decreased by USD 303 million to USD 7,596 million as per data released by the Central Bank.
Central Bank reserves decline due to external debt repayments, which included repayment of a commercial loan and interest payment on Eurobonds, says SBP in a statement.
Pakistan Central Bank reserves will increase once committed amount of aid for the flood victims starting and flows from financial institutions such as ADB, WB, AIIB starts coming to the country.
The Asian Development Band (ADB) will provide flood relief support to Pakistan to the tune of US$ 2.3 to 2.5 billion including US$ 1.5 billion for the BRACE program which will be placed before the ADB Board for approval during this month, Country Director ADB for Pakistan Yong Ye told Finance Minister Senator Mohammad Ishaq Dar.
Yong Ye also apprised the minister about the ongoing and future projects of ADB in different sectors including social protection, food security and energy sectors.
At present, SBP reserves stand at the level of USD 7,596 million as of 7th October 2022, which is the lowest level since July 2019, compared to USD 7,899 million at the end of the week ending 30th September 2022.
During the same period, foreign exchange reserves held by commercial banks decreased by USD 39 million to the level of USD 5,649 million as of 7th October 2022.
Overall reserves held by the country witnessed decrease of USD 342 million to USD 13,247 million during the week ended 7th October 2022.
Pakistan Central Bank projected that with the completion of the upcoming IMF review and the additional assistance secured from friendly countries, FX reserves are expected to rise to around $16 billion during FY23. To ensure this and to support the Rupee going forward, it will be important to contain the current account deficit to around 3 percent of GDP by moderating domestic demand and energy imports. In addition, it will be critical to keep the IMF program on-track by following through on the agreed fiscal tightening and structural reforms over the next 12 months.