Central bank rules out forex reserves have 'dried up'

Karachi: Dismising reports that its foreign exchange reserves had "dried up", the State Bank of Pakistan (SBP) Tuesday clarified that neither the country's banks had run out of US dollars nor the central bank had stopped import payments.

The statement from the central bank comes amid reports of its reserves falling to an alarmingly low level along with the suspension of import payments.

However, the SBP said its foreign reserves stood at $8.99 billion. "These do not include gold reserves, and are fully usable for all purposes."

The central bank clarified that it had not stopped import payments and that commercial banks had sufficient dollar liquidity to execute those payments.

"Import payments of around $4.7bn have been executed through the interbank market during the month so far," the SBP added.

Earlier, a Dawn report said the currency market was gripped by uncertainty and rumours that banks have stopped opening letters of credit (LCs)

“State Bank has not stopped banks from making import payments. Even today, roughly about $200m import payments have been executed,” SBP Chief Spokesman Abid Qamar said earlier in the day.

Pakistan’s reserves have fallen by another $234 million to close just below $15 billion. The central bank's share in these reserves is just under $9 billion, SBP said.