SBP forex reserves rise by $23m to $10.7bn

KARACHI: Pakistan’s central bank’s foreign exchange reserves slightly increased by $23 million to $10.7 billion during the week ended April 4, the State Bank of Pakistan (SBP) said on Thursday.

The total liquid foreign reserves held by the country also rose by $173 million to $15.75 billion. The reserves of commercial banks increased by $150 million to $5.05 billion.

Last week, President Trump imposed significant tariffs on imports from US trading partners. Recession fears, intensified by the trade conflict between the US and China -- the world’s two largest economies -- led to a plunge in global financial markets and a substantial drop in oil prices. However, on Wednesday, the US announced a 90-day reciprocal tariff delay and raised taxes on some Chinese imports to 125 per cent, marking a dramatic policy change.

Analysts believe that the declining commodity prices will reduce Pakistan’s oil import bill and inflation. The falling oil prices can decrease the oil-related import bill (including RLNG) to the extent of $2-2.1 billion. However, textiles, which account for 75 per cent of the country’s total exports of $5 billion to $6 billion, are likely to be affected by the higher US tariffs.