KARACHI: After having maintained a declining trend in the last three months, the State Bank of Pakistan’s (SBP) foreign exchange reserves witnessed a meagre increase of $258 million to $4.6 billion during the week that ended on Jan 13, but still at an alarming level not sufficient to cover even the country’s three weeks’ imports.

However, the currency dealers said the SBP bought the dollars from the market to improve its reserves. “This has been a common practice for a long time,” they added.

The central bank on Thursday reported that its reserves improved to $4.6bn from $4.4bn in the preceding week. The last increase in SBP reserves was recorded in October 2022 to $8.759bn from $7.859bn in September.

A day earlier, the SBP governor assured the traders and industrialists that dollar inflows would begin in the coming weeks. Neither the businessmen nor the currency experts believed Mr Jameel as he had been telling the nation since he took over the charge that arrangements have been made for repayment of $32 billion required by end of this FY23.

The drying up of foreign exchange reserves contradicted his repeated claims and a growing mistrust of his policies was witnessed during his talks with the business community on Wednesday.

Exchange companies have also asked the SBP to allow them open letters of credit up to $50,000, but no response.

The business community had asked the SBP to clear their LCs up to $5,000.

SBP reported the foreign exchange reserves of the commercial banks declined by $2m to $5.84m while the country’s total reserves were $10.443bn during the week. The dollar traded at Rs229.15 in the interbank with an appreciation of 24 paise over the previous day.

Published in Dawn, January 20th, 2023