- Reserves fall for fifth week to $22.28bn; FDI dips for second month in Feb to $90.8m
KARACHI, (TLTP): The foreign exchange reserves of the country dropped for the fifth straight week to $22.28 billion, while the foreign direct investment (FDI) flows to Pakistan dropped by 17.5 percent in February to $90.8 million against the inflows of $110 million recorded in January 2022.
According to data released by the State Bank of Pakistan (SBP) on Thursday, the foreign exchange reserves held by the central bank decreased 2.35 percent on a weekly basis.
On March 11, the foreign currency reserves held by the SBP were recorded at $15,831.6 million, down $381 million compared with $16,212.2 million on March 4. The central bank gave no reason for the fall in reserves.
Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $22,283.4 million. Net reserves held by banks amounted to $6,451.8 million.
The SBP said that FDI flows to Pakistan fell for the second consecutive month in February 2022 to $90.8 million against the inflows of $110 million in January 2022. On a year-on-year basis, FDI fell by 33.7 percent when compared to $137 million in February 2021.
Meanwhile, the country fetched FDI amounting to $1.26 billion during July-February period of the current fiscal year as against $1.19 billion recorded in the corresponding period of the previous fiscal year, showing a decline of 6.1 percent.
During the month of February 2022, the foreign private investment into the country amounted to $83.8 million, out of which, $90.8 million were attributed to direct investments, whereas disinvestment of $6.9 million was attributed to equity securities i.e., a part of portfolio investments.
Within the direct investments, there was an inflow of $153.2 million and an outflow of $62.4 million during the month.
The sequential decline in the FDI inflows was attributed to the significantly decreased investments from China as net investment inflows from China plunged by 55 percent MoM to $24.1 million from $53.7 million reported in January 2022. While inflows from Norway stood at $20 million and FDI from Switzerland observed a marginal drop of 3.7% to $12.3 million.
Sector-wise, the financial business attracted the highest net FDI of $44.3 million during the month of February 2022, followed by the power sector with $22.8mn and oil & gas explorations with $16.7 million.
The International Monetary Fund’s (IMF) Executive Board on February 2 approved Pakistan’s request for an $1 billion loan tranche. A meeting of the IMF’s Executive Board took place to discuss and finalise Pakistan’s request for the completion of the sixth Review and release of a $1 billion tranche under the Extended Fund Facility (EFF).
The foreign exchange reserves held by the central bank soared to an all-time high of $20.15 billion after Pakistan received a general allocation of Special Drawing Rights (SDRs) worth $2,751.8 million from the International Monetary Fund (IMF) on August 24.