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Wednesday February 19, 2025

SBP forex reserves drop to $11.71bn on debt repayments

By Our Correspondent
January 03, 2025
A foreign currency dealer counts US dollar notes at a currency market in Karachi on July 19, 2022. — AFP
A foreign currency dealer counts US dollar notes at a currency market in Karachi on July 19, 2022. — AFP

KARACHI: Pakistan’s foreign exchange reserves held by the central bank fell by $143 million to $11.71 billion in the week ending December 27 due to external debt repayments, the State Bank of Pakistan (SBP) said on Thursday.

However, the country’s forex reserves increased by $37 million to $16.409 billion, and the reserves of commercial banks rose by $180 million to $4.698 billion.According to analysts who cited SBP data, Pakistan had $5.5 billion in external repayments in December 2024.

During an analyst briefing after the monetary policy meeting on December 16, Governor State Bank of Pakistan Jameel Ahmad said that out of the $26.1 billion in external repayments, $10.4 billion has already been paid or rolled over. The remaining debt repayment for the fiscal year, excluding planned rollovers, stands at $5 billion.

Ahmad said that the inflows expected in the third quarter of FY25 from official channels would roughly equal the outflows of $2 billion. He anticipates that foreign exchange reserves will exceed the level of $13 billion by the end of June 2025.

Recently, the country secured $300 million in short-term loans from United Bank Limited in an effort to meet its external financing requirements.The IMF has projected Pakistan’s cumulative gross external financing requirements over FY25-FY29 at $110.5 billion. Additionally, apart from IMF-related inflows to bridge the financing requirements, additional prospective financing to the tune of $5 billion has also been made part of the projections over the course of the IMF’s Extended Fund Facility programme in order to cover the financing gap emanating from the IMF’s safeguards assessment (December 2023).