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Pakistan’s forex reserves plunge to lowest level since 2014

Karachi: Pakistan’s central bank forex reserves have plunged to their lowest level since February 2014 after a decline of 22.11 per cent, posing a serious challenge for the country in financing imports, local media reported.

Thursday’s announcement by the State Bank of Pakistan (SBP) came as the country is in dire need of foreign aid to reduce its current account deficit as well as ensure enough reserves to pay its debt obligations for the ongoing financial year, Geo News reported.

Coupled with another $5.8 billion held by commercial banks, the nation has $10.2 billion in reserves – enough to pay for just three weeks of imports.

During the week ended on January 6, the central bank’s forex reserves fell $1,233 million, or 22.12 per cent, to $4,343.2 million, a statement from the central bank said, down from last week’s reserves of $5,576.5 million.

Pakistan’s economy has crumbled alongside a simmering political crisis, with the rupee plummeting and inflation at decades-high levels, but devastating floods and a global energy crisis have piled on further pressure, Geo News reported.

The reserves, which hit their lowest level since February 2014, will now only provide import cover worth 0.82 months, as the country tries to lessen imports amid a greenback shortage.

Last week, Finance Minister Ishaq Dar had said that Pakistan’s foreign exchange reserves would “strengthen” in the coming days as he banked on friendly countries for inflows.

The central bank mentioned that the country repaid $1,233 million in external debt. This repayment has been reflected in the data released on Thursday.

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