SBP Forex Reserves Decrease by $65.3 Million - Android

The foreign exchange reserves of the State Bank of Pakistan (SBP) fell by $65.3 million weekly. According to the central… Read More

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The foreign exchange reserves of the State Bank of Pakistan (SBP) fell by $65.3 million weekly. According to the central bank, external debt repayments are the cause of this decline.

Pakistan’s total Forex Reserves decreased by $59.1 million (or 0.29 percent) clocking in at $20.254 billion on December 24, 2020.

In November, SBP saw a steep fall of $305 million in reserves for the week ending November 27, 2020. This pressure of external debt repayments has caused the Forex reserves held by the country to slowly but consistently go down over the past few months. Earlier in November, a weekly fall for SBP amounted to $558 million.

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The debt servicing consumes up to 80 percent of the country’s Gross Domestic Product (GDP). Moreover, despite Pakistan’s ability to bring in financing, such as China helping with the repayment of loans to Saudi Arabia, the impact on the total SBP reserves is tangible and unavoidable.

Experts believe that the only long term, sustainable way to avoid continued depletion of Forex reserves is the improvement in exports and better management of import expenditure.

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