Pakistan’s foreign exchange reserves have dropped once again, as reported by the State Bank of Pakistan (SBP). According to the latest figures released by the central bank, the country’s forex reserves fell by $152 million in just one week.
Decline in Reserves
As of March 7, 2025, the foreign exchange reserves held by the SBP stood at $11.098 billion. This marks a decrease from $11.250 billion recorded on February 28, showing a sharp decline within a short period.
Reason Behind the Drop
The central bank has attributed this decline to external debt repayments. Pakistan, like many developing countries, regularly makes payments on its external debts, which affects its forex reserves. This outflow of dollars puts pressure on the overall economic stability of the country.
Total Reserves in the Country
Despite the drop in SBP-held reserves, the total liquid foreign exchange reserves of Pakistan, including those held by private banks, saw a slight increase. The total reserves in the country now stand at $15.929 billion, reflecting an increase of $55 million from the previous week.
Increase in Private Bank Reserves
Interestingly, the reserves held by private banks in Pakistan increased significantly. The net reserves with commercial banks were recorded at $4.831 billion, which is a rise of $206 million within a week. This suggests that while the SBP’s reserves are under pressure, private sector holdings are growing.
Economic Impact and Future Outlook
The decline in forex reserves is a concern for Pakistan’s economic stability, as the country relies on these reserves to manage imports, stabilize the currency, and handle debt repayments. A continued decrease in reserves could lead to pressure on the Pakistani rupee and impact inflation rates.
To address this, Pakistan needs to focus on increasing foreign investments, improving exports, and securing financial support from international partners. Maintaining stable reserves is crucial for sustaining economic growth and avoiding potential financial crises.
This latest development highlights the challenges Pakistan faces in managing its external payments while ensuring economic stability. With strategic planning and policy reforms, the country can work towards stabilizing its forex reserves and strengthening its financial position in the global market.
Read Also: Currency Exchange Rates in Pakistan – 1st January 2025!
