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Business Latest Pakistan

Foreign exchange reserves decline by $591 million

KARACHI: The country foreign exchange reserves are once again on a decline, indicating that the country may face a balance of payment crisis.

The data released by the State Bank of Pakistan said that the foreign exchange reserves held by the central bank dipped 7.34% on a weekly basis.

The reserves once again fell below the $8-billion mark, raising concern about Pakistan’s ability to meet its financing requirements.

Pakistan’s reserves were fast depleting before the much-needed aid from Saudi Arabia.

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On December 21, the foreign currency reserves held by the SBP were recorded at $7,457.3 million, down $591 million compared with $8,048.3 million in the previous week.

The decrease was attributed to external debt servicing and other official payments.

Overall, liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $14,017.8 million. Net reserves held by banks amounted to $6,560.5 million.

Last month, Chinese Embassy Deputy Head of Mission Zhao Lijian assured Pakistan of a financial package to boost its flagging foreign currency reserves, hinting that it would be bigger than that pledged by Saudi Arabia.

More than a month ago, China agreed to immediately give a loan of $2 billion to Pakistan, a move meant to arrest the slide in foreign currency reserves and provide much-needed breathing space to the new government.