Karachi: Pakistan Foreign Exchange Reserves are constantly decreasing. They are shrinking on a weekly basis with 1.48%. However, it is a 16th consecutive week of decline in reserves. It is also raising concerns over Pakistan’s ability to manage the current account deficit and payment obligations in the future.
The Threatening Situation
State Bank of Pakistan released a data that reveals the threatening economic condition of Pakistan. On March 30, Pakistan foreign exchange reserves were $11,602 million. However, it was 1.48% lower than the previous week’s reserve of $11,776.1 million. In November 2017, Pakistan raised $2.5 billion by floating sovereign bonds in the global market to provide support to official reserves. Official inflows of $106 million and $622 million from the World Bank and the Asian Development Bank (ADB) are also a reason for the surging of foreign currency reserves.
Impact on Economy
Overall, Pakistan liquid foreign reserves, including net reserves by banks excluding federal bank, stood at the figure of $17,796.4 million. The figure of $6,194.4 million is reported as net reserves held by banks. The decline in foreign exchanges is severely affecting the national economy. The Pakistani Currency is also facing rapid devaluation against the US Dollar. Economists and financial analysts believe that government should develop and implement effective financial policies to deal with this threatening issue.