The “mysterious” $258 million increase in Pakistan’s forex reserves

Pakistan's foreign exchange reserves increased by $258 million, but the source of the inflow was unknown.

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Data released by the State Bank of Pakistan (SBP) on Thursday evening showed that Pakistan’s foreign exchange reserves for the week-ending January 13 stood at a level of $10.443 billion.

This was up by $255.8 billion from the previous week’s level of $10.188 billion.

The data further showed that reserves held with the central bank had increased by $258 million from the level of $4.343 billion last week to $4.601 billion.

This is the first cumulative increase that the central bank’s accounts have seen in four months.

The increase was not explained by the SBP in its statement at a point where the current account deficit for December remained at $400 million at a time where exports recorded a marginal increase. While imports saw a major decline, it was still more than the inflows of exports and remittances combined – which also slowed.

It remains at the lowest level for reserves held with SBP for the past nine years hen reserves fell to $3.92 billion in February 2014.

At the moment, the funds available with the SBP are sufficient to cover only a month’s imports having spent $4.218 billion on imports in December 2022.

Meanwhile, reserves held by the commercial banks saw a narrow decline, falling by $2.2 million from $5.845 billion last week to $5.842 billion.

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