Pakistan FX reserves sink to three weeks' worth of import cover

The drop was due to external debt repayments, the State Bank of Pakistan says

The logo of the State Bank of Pakistan (SBP) is pictured on a reception desk at the head office in Karachi, Pakistan, Jul 16, 2019. REUTERS

Pakistan's foreign exchange reserves held by the central bank dropped $1.2 billion to $4.3 billion as of Jan 6, the bank said on Thursday, leaving the cash-strapped country with barely three weeks' worth of import cover.

The drop was due to external debt repayments, the State Bank of Pakistan (SBP) said in a statement.

Net foreign exchange reserves held by commercial banks stood at $5.8 billion, and total liquid reserves at $10.1 billion, the bank added.

Despite recent compression measures by the government, Pakistan's import bill for goods was $5.1 billion per month in both November and December, according to the country's statistics bureau. Its main imports are critical energy-related fuels.