KARACHI: After witnessing a consistent increase for several weeks, the State Bank of Pakistan (SBP) foreign exchange reserves noted an outflow of $228 million to $11.85 billion during the week ended on Dec 20.

On Thursday, the central bank announced that the reserves fell due to external debt payments.

The country is required to repay $26.1bn during the current fiscal year. The government has partially paid some amount, and a significant debt has been rolled over for another year.

However, about $14bn is still required to meet the external repayment obligations for FY25. Since the official foreign inflows are limited, the SBP has been buying dollars from the banking market.

The SBP is expected to boost its reserves to $13bn by the end of FY25. The frequent increases in the SBP reserves during the last two months were encouraging, and the target was expected to be achieved well before the year ended.

The SBP report showed that commercial banks and the country’s overall reserves also fell during the week. The country’s foreign exchange reserves fell by $261m to $16.371bn, while the commercial banks’ holdings shrank by $33m to $4.518bn.

Published in Dawn, December 27th, 2024