KARACHI: The foreign exchange reserves of the country fell by $139 million to $18.829bn during the week ended Feb 16, the State Bank of Pakistan (SBP) reported on Thursday.
The foreign exchange reserves have been taking a toll each successive week, posing the risk they could fall below the critical level that requires the country to have forex holdings to cover at least three months’ imports.
The reserves held by the SBP also dropped to $12.704bn, seeing a decline of $130m due to external debt-servicing and other official payments.
The central bank’s reserves are being used to meet the widening current account deficit, which increased by 48 per cent to $9.2bn in the first seven months of this fiscal year.
The holdings of commercial banks witnessed a slight fall of $9m to $6.125m during the week under review.
The updated data of the State Bank showed that the country had to pay $1.523bn in debt servicing in the second quarter of FY18.
However, the details showed that the principal amount drastically shrank in the second quarter while the interest payments rose significantly.
The country paid $1.714bn as principal amount of debt servicing in the first quarter which fell to just $924m in the second.
On the other hand, the amount of interest was $389m which rose to $599m in the second quarter. The decreasing amounts of principal do not help the country enough to reduce its debts.
Published in Dawn, February 23rd, 2018
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