KARACHI: During the week ending April 19, the State Bank of Pakistan’s (SBP) foreign exchange reserves decreased by $74 million to $7.981 billion.
Repayment of external debt was the cause of the fall, the central bank said on Thursday.
The SBP did not disclose a decrease in its foreign exchange holdings, but it did pay $1 billion in the second week of this month to cover the maturities of Eurobonds. Many people who were closely following the development found this to be startling. The SBP has not provided an explanation for how it managed to maintain reserves above $8 billion even after paying off its $1 billion Eurobond debt.
According to recent statements made by the finance minister, the SBP reserves would rise to $10–$11 billion by the end of June. He anticipates getting $1.1 billion from the IMF as the final payment under the $3 billion Stand-By Agreement, which expires this month.
The SBP report states that the nation’s total reserves, which include $5.299 billion held by commercial banks, came to $13.280 billion.
The interbank currency market is still calm due to import limitations, and banks are not under pressure from the dollar demand. Concurrently, exporters have been offloading their entire export earnings to hedge against potential losses should the local currency continue to gain value relative to the US dollar.
