SBP reserves fall $371m in two weeks

The fast erosion of foreign exchange reserves has made it doubtful for the State Bank of Pakistan (SBP) to reach the $13 billion target by the end of FY25. During the last two weeks, the SBP forex holdings witnessed an outflow of $371 million higher than the $300m loan United Bank Ltd arranged for the country recently. The central bank reported on Thursday that the reserves fell $143m to $11.71bn during the week ended on Dec 27, 2024. The preceding week witnessed an outflow of $228m. The State Bank said the reserves were used for external repayment obligations. The massive debt servicing has been a key hurdle that has marred economic growth despite improved remittance inflow. The remittances sent by the overseas Pakistanis are almost cost-free for the country but over 90pc is used for the debt servicing.