The foreign exchange reserves held by the central bank rose 1.5% every week, according to data analysis issued by the State Bank of Pakistan (SBP) on Thursday. On November 13, the foreign currency reserves held by the SBP were recorded at $12,931.2 million, up to $191 million compared with $12,740.5 million in the previous week. The central bank cited no reason for the increase in reserves.
The liquid foreign exchange reserves presently held by the country have increased by 5.62% over the previous month according to the stats issued by the State Bank of Pakistan (SBP). The current total liquid foreign exchange reserves values are $20,085 million as compared to $19,015 million on 9 October 2020. Net reserves with the SBP were recorded to be $12,931 million which has turned out to be the highest since February 2, 2018.
However, analysts associated this increment with the improvement in the balance of payments, current account surplus, dollar inflows from multilateral sources, and market-based exchange rate regime.
“Reserves accumulation is good, but Pakistan needs them to be even higher than this to absorb external account shocks and manage its currency,” said Mohammed Sohail, CEO at Topline Securities.
Moreover, some analysts have also stated that Pakistan has to repay around $2 billion in loans and also return potential loans taken to bolster reserves. These repayment outflows could put pressure on the foreign exchange reserves and the rupee in future times.
Therefore, as a result of a colossal inflow of worker’s remittances as well as the increase in overall corporate profitability in Pakistan. The Foreign Direct Investment (FDI) has also doubled during the first quarter of the Fiscal Year 2020-21. An increasing number of people are selling their dollar reserves at an increasingly lesser rate due to the gain of the rupee against the dollar.
Image Source Pakistan Defence
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