Pakistan’s foreign exchange reserves saw a significant decline of $2.66 billion during the business week ending June 20, according to the latest data released by the State Bank of Pakistan (SBP).
The central bank’s reserves fell from $11.72 billion to approximately $9.06 billion. However, commercial banks’ dollar deposits increased by $50 million, reaching $5.33 billion. As a result, Pakistans total foreign exchange reserves now stand at $14.40 billion.
The report attributes the sharp decline primarily to loan repayments made to Chinese and other international commercial banks.
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Despite the decrease, there is a silver lining. Banking sources revealed that some commercial loans have been rescheduled and the repaid amounts have since returned to Pakistan. Additionally, Pakistan secured $500 million in loan assistance from the World Bank and the Asian Development Bank.
Moreover, the SBP confirmed that the Government of Pakistan has obtained new commercial loans worth $3.10 billion. These funds will be reflected in the forex reserves data for the week ending June 27.
Economic analysts say that while the recent drop in reserves is concerning, the incoming loans and rescheduling agreements may help stabilize Pakistans short-term external financing needs.
