According to information issued by the central bank on Thursday, the foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by $584 million to $6.11 billion in a week.
The State Bank of Pakistan (SBP) stated in a statement that there was a $570 million decrease in the overall liquid foreign reserves. From $12.57 billion to $12 billion, the total reserves decreased.
Commercial banks now have over $5.88 billion in net foreign reserves, a rise of $13 million.
The SBP’s foreign exchange reserves dropped by $15 million to $6.7 billion last week, signaling the urgent need for the International Monetary Fund (IMF) program to resume.
In a separate incident today, S&P Global, a global rating agency, lowered Pakistan’s long-term sovereign credit rating from “B” to “CCC+” in response to Moody’s and Fitch’s action, to reflect the continuous deterioration of the nation’s external, fiscal, and economic parameters.
According to a statement from S&P Global, Pakistan’s already meager foreign exchange reserves will continue to be under pressure until 2023 barring a drop in oil prices or an improvement in foreign aid. The nation also confronts significant political risks that could alter its future course of policies.
This year’s severe floods, surging food and energy inflation as well as rising global interest rates are also expected to depress Pakistan’s economic and fiscal outcomes, with refinancing challenges over the medium term, the report said. The agency maintained its outlook at “stable”.