Karachi December 8 2022: SBP foreign exchange reserves for the week ending December 2 2022, were decreased by USD 784 million to USD 6,715 million the level last witnessed in January 2019, as per data released by the Central Bank.
This decline was on account of the payment of USD 1,000 million against maturing Pakistan International Sukuk and some other external debt repayments.
Some of the debt repayments were offset by inflows, mainly USD 500 million received from Asian Infrastructure Investment Bank (AIIB).
“The foreign exchange reserves are expected to be in a better position as government is in talks with bilateral and multilateral lenders for financial supports” says SBP Governor.
With the efforts of the current government, the IMF program has come back on track and negotiations leading to 9th Review are now at an advanced stage says Ministry of Finance in a statement.
The statement added that government’s recent efforts have resulted, amongst others, in lower current account deficits in recent months and achievement of FBR revenue targets. Easing up of pressure on external account is also foreseen in the near future. While there remains the need to make structural adjustments in the mid-term, the economic situation of the country is now moving towards stability.
At present, SBP reserves stand at the level of USD 6,715 million as of 2nd December 2022, compared to USD 7,498 million at the end of the week ending 25th November 2022.
During the same period, foreign exchange reserves held by commercial banks decreased by USD 13 million to the level of USD 5,866 million as of 2nd December 2022.
Overall reserves held by the country witnessed decrease of USD 797 million to USD 12,581 million during the week ended 2nd December 2022.
Pakistan Central Bank projected that the current account deficit is expected to remain moderate in FY23, with FX reserves gradually improving as anticipated external inflows from bilateral and multilateral sources materialize. If the recent decline in global oil prices intensifies or the pace of rate hikes by major central banks slows, pressures on the external account could diminish further.
