KARACHI: The central bank’s foreign exchange reserves dropped $303 million to a three-year low of $7.597 billion in the week ending Oct 7, it said on Thursday, while the rupee also edged lower for a second day.

The reserves fell due to external debt repayments, including repayments of a commercial loan and interest payments and Eurobonds, the State Bank of Pakistan (SBP) said.

Reserved held by commercial banks dropped by around $39m, to $5.649bn during the week. The country’s total reserves now stand at $13.247bn, down $342m from the previous week.

The SBP held reserves of $7.29bn by the end of the 2018-19 fiscal year, which jumped to $12.13bn and then to $17.29bn in the subsequent years before falling to $9.19bn by the close of the previous fiscal year.

Rupee continues fall against dollar for second day, closes at 218.38

Meanwhile, the rupee fell 0.23 per cent in the interbank market to close at 218.38 to the dollar on Thursday. Before that, the rupee went up for 13 straight sessions, gaining from 239.71 on Sept 22 to 217.79 on Oct 11 — a difference of around Rs22.

In the open market, the local currency was trading at Rs222 against the dollar on Thursday, up Rs1.50.

Currency market experts believe falling forex reserves threaten the rupee’s recent recovery at a time when the finance minister wants it to fall below Rs200 against the dollar.

They see the local currency struggling to make gains in the coming days, particularly in the wake of the dollar’s bullish trend the world over against all major currencies.

However, some important developments on the external front of the economy are expected, such as the deferment of Chinese loans, and inflows from the World Bank, Asian Development Bank and other credit sources.

Published in Dawn, October 14th, 2022