Forex reserves decline by $102m to $4.1bn

KARACHI: Pakistan's foreign exchange reserves held by the central bank fell by $102 million to $4.090 billion in the week ending May 26, the State Bank of Pakistan (SBP) said on Thursday. The SBP's reserves are barely enough to cover a month's imports. The total reserves of the country dropped by $218 million to $9.513 billion. The reserves of commercial banks also fell by $116 million to $5.422 billion. The SBP attributed the fall in the reserves to the repayment of external debt.

The persistent depletion in the forex reserves is not a healthy sign for Pakistan, which is facing a balance of payment crisis and the risk of sovereign default. Pakistan is intensifying its efforts to get financing from the International Monetary Fund (IMF). The nation has approximately $3.7 billion in foreign debt that is due in June. The IMF has expressed concerns about the functioning of the foreign exchange market. The administrative measures adopted to control the exchange rate, including import curbs, have evidently drawn the ire of the IMF.