Karachi: Pakistan’s official foreign reserves have decreased, while the country’s total reserves saw a slight increase. According to the latest data from the State Bank of Pakistan, total reserves rose by $3.72 million by the week ending December 27, reaching $16.4 billion, compared to $16.37 billion in the previous week.
The central bank reported a decline of $14.3 million in its own reserves, which fell from $11.853 billion to $11.711 billion. This decrease was primarily due to the repayment of external debts. The central bank’s reserves are crucial for stabilizing the economy, and the drop highlights the financial pressure the country is facing.
However, the reserves held by commercial banks showed an increase. Commercial banks’ reserves rose by $18.2 million, climbing from $4.518 billion to $4.698 billion. This positive shift is largely attributed to the influx of remittances and other forms of income coming into the country.
The modest overall increase in total reserves comes at a time when Pakistan continues to grapple with economic challenges. Despite the dip in official reserves, the rise in commercial bank reserves signals a positive trend in the country’s financial landscape. Remittances have been a key factor in stabilizing the reserves, as Pakistan’s diaspora continues to send money back home, providing a vital source of foreign currency.
Scheduled Debt Repayments.
The central bank noted that the decrease in its reserves was expected due to scheduled debt repayments. Pakistan has been managing its foreign obligations with regular debt servicing, but these payments impact the available reserves. The reliance on external debt has long been a concern for the country’s financial stability, and any fluctuations in foreign reserves are closely monitored by economists.
Despite the ongoing challenges, the increase in commercial bank reserves suggests that the private sector is benefiting from financial inflows. Remittances, which have been a consistent source of support for the country’s economy, continue to play an essential role. The government has been making efforts to boost remittance flows and other income sources to support the national economy and ensure stability in foreign reserves.
As Pakistan navigates through its economic challenges, the growth in total reserves, even if modest, is seen as a positive sign. It shows that while official reserves are under pressure, other factors, such as remittances, are helping to cushion the impact. The situation highlights the need for continued efforts to diversify sources of income and ensure long-term economic stability.
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