KARACHI: The foreign exchange reserves held by the State Bank of Pakistan (SBP) declined $584 million to $6.11 billion in a week, according to data released by the central bank Thursday.
In a statement, the State Bank of Pakistan (SBP) said the total liquid foreign reserves witnessed a reduction of $570 million. The overall reserves were reduced from $12.57 billion to $12 billion.
Net foreign reserves held by commercial banks increased to over $5.88 billion after an increase of $13 million.
Last week, the SBP’s foreign exchange reserves had fallen $15 million to $6.7 billion, indicating an urgent need for the resumption of the International Monetary Fund (IMF) programme.
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In another development today, following Moody and Fitch’s move, Global ratings agency S&P Global cut Pakistan’s long-term sovereign credit rating by one notch to “CCC+” from “B” to reflect a continued weakening of the country’s external, fiscal and economic metrics.
The S&P Global, in a statement, said Pakistan’s already low foreign exchange reserves will remain under pressure through 2023 unless oil prices slump or foreign assistance improves.
The country also faces elevated political risks which may affect its policy trajectory over the next year.
This year’s severe floods, surging food and energy inflation as well as rising global interest rates are also expected to depress Pakistan’s economic and fiscal outcomes, with refinancing challenges over the medium term, the report said.
The agency maintained its outlook at “stable”.