SBP’s forex reserves fall below that of commercial banks for first time in decade

The State Bank of Pakistan (SBP) on Thursday shared data for the national foreign exchange reserves. It noted that the reserves fell by $294 million to $5.82 billion, owing primarily to debt repayments.

It is pertinent to note that this is the lowest level of SBP-held reserves since March 2014, when the reserves had dipped to $5.366 billion.

In a tweet, SBP shared that the total liquid foreign reserves held by the country have fallen to $11.71 billion. This was down by $292.9 million.

 

 

This was the lowest level of the national foreign reserves since October 31, 2019, when the reserves stood at $11.156 billion.

The net foreign reserves held by commercial banks stood at $5.89 billion, swelling marginally by $1.4 million from last week’s level of $5.884 billion.

Deficit

However, the worrying aspect was that the reserves held by the central bank fell below the level of foreign exchange held by commercial banks for the first time in over a decade.

The deficit was around $63.4 million.

This is the worst position of forex reserves of the the SBP since July 31, 2010.

The reserves of the central bank had dipped dangerously close to the level of the commercial banks once before in the past decade when in November 2013, the reserves held by SBP fell to $3.048 billion while the reserves held by commercial banks were at a meager $2.408 billion with the difference narrowed to just $640 million.

But it never reached a stage where the reserves with SBP were lower than that of commercial banks.

It is relevant to mention here that last week, foreign exchange reserves held by the SBP had fallen $584 million to $6.12 billion.