Pakistan’s foreign exchange reserves drop as SBP repays debts

The total liquid foreign reserves, which include holdings by commercial banks, currently stand at $13.15bn

The State Bank of Pakistan (SBP) reported a decline in its foreign exchange reserves, which fell by $127 million in the week ending January 12, settling at $8.03 billion. This downturn in reserves was primarily due to the repayment of external debts.

The country’s total liquid foreign reserves, which include holdings by commercial banks, currently stand at $13.15 billion. Out of this, commercial banks possess $5.12 billion.

This decrease follows a previous reduction of $66 million in the central bank’s reserves. However, in a significant fiscal development, Pakistan received a substantial sum from the International Monetary Fund (IMF). The SBP confirmed receiving a tranche of $705.6 million from the IMF on January 16, following the successful completion of the first review under the IMF’s Stand By Arrangement (SBA).

“The SBP has received SDR 528 million, equivalent to $705.6 million, from the IMF. This is a direct consequence of the Executive Board of IMF’s approval under the SBA program,” the central bank stated.

The latest IMF disbursement is expected to be reflected in the SBP’s reserve tally for the week ending January 19, offering a potential boost to Pakistan’s foreign exchange reserves amidst ongoing fiscal challenges.

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