Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) soared by nearly 20% — to a 15-week high — surpassing the crucial threshold of $8 billion.
On October 28, the foreign currency reserves held by the SBP were at $8,912.9 million, down by $157 million compared with $7,439.9 million on October 1, data released by SBP showed on Thursday.
SBP has received $1.5 billion from the Asian Development Bank (ADB) as a disbursement of loans for the government of Pakistan.
Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $14,678.9 million.
Net reserves held by banks amounted to $5,766 million. The central bank cited the receipt of $1,500 million from the ADB.
With the current foreign exchange reserves position, Pakistan has an import cover of fewer than 1.29 months. The reserves’ position is critical for Pakistan which has been desperately seeking dollar inflows to meet its balance-of-payments needs.
A critical level of reserves has caused severe pressure on the Pakistani rupee with the local unit depreciating constantly. Pakistan’s economy faces serious challenges due to decreasing foreign exchange reserves and political instability.
Foreign exchange reserves were decreasing on weekly basis earlier due to an increase in imports and had fallen below $8 billion, which was an alarming situation. However, funds from multi-lateral partners will improve the position.