The foreign exchange reserves held by the central bank declined 0.3% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On August 20, the foreign currency reserves held by the SBP were recorded at $17,578.9 million, down $47 million compared with $17,625.9 million on August 13.

According to the central bank, the outflow came on account of debt repayments.

“On August 23, 2021, the SBP received IMF SDR allocation of $2,751.8 million,” it said. “This amount will increase foreign exchange reserves of the SBP and will be reflected in the data to be published on September 2, 2021.”

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $24,619.3 million. Net reserves held by banks amounted to $7,040.4 million.

Earlier, Pakistan borrowed $2.5 billion through Eurobonds on March 30, 2021 by offering lucrative interest rates to lenders aimed at building the foreign exchange reserves.

It received the first loan tranche of $991.4 million from the International Monetary Fund (IMF) on July 9, 2019, which helped bolster the reserves. In late December 2019, the IMF released the second loan tranche of around $454 million.

The reserves also jumped on account of $2.5 billion in inflows from China. In 2020, the SBP successfully made foreign debt repayment of over $1 billion on the maturity of Sukuk.

In December 2019, the foreign exchange reserves surpassed the $10 billion mark owing to inflows from multilateral lenders including $1.3 billion from the Asian Development Bank (ADB).

Published in The Express Tribune, August 27th, 2021.

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