Forex reserves fall by $206mn to $14.208bn

KARACHI: Pakistan’s foreign exchange reserves dropped by $206 million to $14.208 billion as of July 29, the central bank data showed on Thursday.

The State Bank of Pakistan’s forex reserves fell by $190 million to $8.385 billion. The reserves of commercial banks declined to $5.823 billion from $5.839 billion in the previous week. The decrease in the SBP’s reserves is due to external debt and other payments, it said in a statement.

The reserves held by the SBP are enough to pay less than two months of imports.

Analysts said the rollover of a $2 billion loan for Pakistan, the revival of the IMF programme, and flows from multilateral and bilateral sources are expected to help shore up foreign exchange reserves. Lower imports are also likely to curb the current account deficit and will help arrest depletion in foreign exchange reserves.

The country’s trade deficit fell 47 percent month-on-month to $2.6 billion in July driven by a drop in imports. Total imports dropped to $4.9 billion in July 2022 from $7.9 billion in the previous month, the Pakistan Bureau of Statistics reported. The decline in imports was attributed to a ban on some items and lower petroleum imports.