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SBP-held foreign reserves fall to alarming $3.7bn

SBP-held foreign reserves fall to alarming $3.7bn


Rupee witnessed second-highest percentage decline, biggest drop was in October 1998

KARACHI (Web Desk) - The State Bank of Pakistan s (SBP) foreign exchange assets decreased significantly by $923 million to barely $3.7 billion, according to numbers released on Thursday.

Since February 2014, SBP-held reserves have never been this low. The nation s total liquid foreign reserves are $9.5 billion. Commercial banks held $5.8 billion in net foreign reserves.

The steep decline in the central bank s reserves, which were roughly $18 billion at the start of 2022, emphasises Pakistan s urgent need to complete the IMF program s subsequent evaluation.

A team from the IMF will go to Islamabad at the end of this month to continue the discussion on the ninth Extended Fund Facility (EFF) review, the IMF announced on Thursday. The ninth evaluation is currently in limbo due to previous conditions of the Washington-based lender.

On Thursday, the Pakistani rupee saw a historic drop versus the US dollar, dropping 9.6% in a single session. The rupee lost 9.61% of its value, or Rs24.54, according to the State Bank of Pakistan (SBP), and ended the day at 255.43 against the US dollar.

This was the second-highest percentage decline ever recorded. The biggest drop was in October 1998, at 9.9%.

According to experts, the inflows are still far from sufficient to cover Pakistan s enormous import demands, which have been strenuously restrained in light of the dollar deficit.