The foreign exchange reserves held by the central bank rose 16.6% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On December 3, the foreign currency reserves held by the SBP were recorded at $18,658.2 million, up $2,648 million compared with $16,010.3 million on November 26.

According to the central bank, the increase in reserves came primarily on the back of $3 billion deposit by the Saudi Fund for Development. “After accounting for external debt and other official payments, SBP reserves increased by $2.648 billion,” it said.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $25,150.7 million. Net reserves held by banks amounted to $6,492.5 million.

Earlier in the week ended on August 27, the foreign exchange reserves held by the central bank soared to an all-time high of $20.15 billion after Pakistan received general allocation of Special Drawing Rights (SDRs) worth $2,751.8 million from the International Monetary Fund (IMF) on August 24.

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

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It received the first loan tranche of $991.4 million from the 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, December 10th, 2021.

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