Karachi: In an alarming development, Pakistan’s forex reserves fell by $584 million, reaching the lowest level since April 2014.
The State Bank of Pakistan (SBP) Thursday reported that during the week that ended on December 16, the SBP-held reserves fell by$584 to reach $6.1 billion.
Contrary to the massive fall in the SBP-held reserves, the net reserves held by the commercial banks went up by $13.7 million, taking the total amount of reserves held by them to $5.9 billion.
Cumulatively, the total foreign exchange reserves witnessed a fall of $570 million to reach $12 billion during the period under review.
With the forex reserves declining to critically low levels, there are fears that Pakistan may not be able to meet its external obligations for the fiscal year 2023.
However, the SBP governor has repeatedly expressed confidence in the country’s capacity to pay back the entire $23 billion due in FY23.
Pakistan’s current account deficit shrinks 57% YoY in Jul-Nov
It is important to note that during the first five months of the current fiscal year, there has been a constant decline in the current account deficit of Pakistan, which is a welcoming sign for the depleting reserves.
According to the SBP, Pakistan’s current account deficit (CAD)has shrunk by 57% on a year-on-year basis during the first five months of the current fiscal year.
Fall in remittances inflows
However, a trend of sharp decline has also been observed in the inflows of remittances during the first five months of FY23 compared to the same period last year, as inflows amounted to $12 billion this year compared to $13.3 billion recorded last year.
