ISLAMABAD: The State Bank of Pakistan's (SBP) foreign currency reserves declined to USD 7.83 billion on August 5 from USD 8.385 billion the previous week due to debt payments, data from the central bank showed.

The State Bank of Pakistan's foreign reserves fell by USD 555 million, or 6.6%, on a weekly basis due to higher debt payments and a lack of external finance, reports by The News.

According to the central bank's report, reserves have dropped to their lowest level since October 2019.  Pakistan's total liquid foreign reserves fell by USD 648 million, or 4.6%, to USD 13.561 billion, while commercial banks' reserves fell by 1.6% to USD 5.730 billion.

The SBP reserves are only enough to cover around a month's worth of imports. The SBP stated in a statement that the decrease in the reverse was due to external debt payments.

"Debt repayments are projected to moderate during the following three weeks," the central bank stated. "In fact, around three-fourths of August debt servicing was concentrated during the first week." The latest foreign reserves figures come as the country faces a lack of external money, with reserves draining quickly due to a stalled USD 6 billion International Monetary Fund programme, citing The News.

Analysts expect the continuation of the IMF programme and the expected lower current account deficit due to decreased imports to help shore up the country's diminishing foreign reserves.

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