KARACHI: The State Bank of Pakistan’s (SBP) foreign exchange reserves declined by $74 million to $7.981 billion during the week ending April 19.

The central bank announced on Thursday that the decline was due to external debt repayments.

The SBP paid $1bn in the second week of this month against the maturity of Eurobonds but did not report any decline in its forex holdings. This was surprising for many who were watching the development keenly. The SBP has not explained how it succeeded in keeping the reserves above $8bn even after clearing its $1bn Eurobond liability.

The finance minister recently said that the SBP reserves would reach $10bn to $11bn by the end of June. He expects to receive $1.1bn from the IMF as the last tranche of the $3bn Stand-By Arrangement expiring this month.

According to SBP report, the country’s total reserves reached $13.280bn including $5.299bn held by commercial banks.

Due to import restrictions, the interbank currency market remains cool, and the banks feel no dollar demand pressure. At the same time, the exporters have been selling their maximum export proceeds to avoid any possible loss in case the local currency further appreciates against the US dollar.

Published in Dawn, April 26th, 2024