An extraordinary decline of $ 2.7 billion in foreign exchange reserves in a week has jeopardized the target of $ 14 billion for the fiscal year 2024-25
Commerce Reporter Daily Dawn + Dawn TV Report
Islamabad: An extraordinary decline in foreign exchange reserves has made it difficult for the State Bank to achieve the target of $ 14 billion for the fiscal year 2025. Due to government loan repayments, the reserves have fallen to a three-year low, which has raised concerns among experts.
The State Bank of Pakistan’s (SBP) foreign exchange reserves have fallen to a three-year low after a significant decline of $2.7 billion in a week, suggesting that the target of $14 billion for the fiscal year 2024-25 may not be achieved.
The SBP reported that its reserves fell by $2.657 billion to $9.64 billion in the week ended June 20, largely due to the government’s repayment of external debt, especially commercial loans, compared to $9.8 billion in fiscal year 2022.
This is the biggest weekly decline in foreign exchange reserves during the current fiscal year, although the overall performance this year has been relatively better than the previous two years.
The late payment of $2.7 billion has affected the State Bank’s estimates, which had earlier raised its reserve target for fiscal year 2025 from $13 billion to $14 billion.
According to financial sector experts, the government may have failed to roll over the expected commercial loans, which has been done successfully in the past, especially with Chinese banks, or the payment was delayed and there was a risk of heavy penalties in case of further delay.
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