In the year 2022 (from December 31, 2021, to December 23, 2022), the State Bank of Pakistan’s (SBP) foreign exchange reserves decreased by 67%, or $11.864 billion, from $17.686 billion to just $5.822 billion.
At the start of the year, the nation’s entire liquid foreign reserves were valued at $23.883 billion, but by year’s end, they had decreased by more than half, to $11.7 billion (till Dec 23).
The significant import bill and the rapidly rising cost of energy caused the nation’s foreign exchange to be continuously depleted. Various steps were made to stop the influx of foreign currency, but they had little effect.
These measures included a longer-term ban on a number of non-essential commodities, which had a terrible impact on regional industries. The hoarding and smuggling of dollars escalated in the final quarter of 2022, further aggravating the situation
The internal and geopolitical environment at the time discouraged foreign investment in the nation. The worldwide economic slump, however, has caused a continuous decline in the receipts from exports and remittances.