Foreign Exchange Reserves Drop by $110 Million

Foreign exchange reserves of the country have recorded a steep decline of $110 million as of March 13.

According to the State Bank of Pakistan (SBP), the reserve level of foreign exchange decreased to stand at $18.7 billion.

The payment against loan repayment to various foreign agencies, Hajj expense and other related payments to foreign entities caused the depletion of reserves in nearly two weeks in March.

Reserves held by the central bank stand at $12.6 billion whereas commercial banks maintain reserves of over $6 billion.

The situation of foreign exchange reserves will continue to be volatile in the coming days as the country is likely to receive foreign assistance on various accounts including the funds to combat coronavirus across the country.

Besides, the divestment trends in the government debt securities are likely to continue with an outflow of over $1.2 billion reported merely in the month of March, which is quite alarming.

On the other hand, the equity market witnessed a bearish trend with outflow of foreign portfolio investment.

The inflow of foreign exchange may be seen in the coming days through investment in government debts securities depending on the profit rates and the global economic scenario.