KARACHI: State Bank of Pakistan’s foreign exchange reserves have dropped to the lowest level since April 2014 as data released on Thursday showed that SBP-held reserves fell another $245 million to a highly critical level of $5.58 billion.
Total liquid foreign reserves held by the country stood at $11.43 billion. Net foreign reserves held by commercial banks stood at $5.85 billion.
“During the week ended on December 30, 2022, SBP’s reserves decreased by $245 million to $5,576.5 million due to external debt repayment,” said the SBP.
Last week, foreign exchange reserves held by the SBP had fallen $294 million to $5.82 billion.
The SBP’s foreign exchange reserves, which were around $18 billion at the beginning of 2022 but have significantly decreased, highlight the pressing necessity for Pakistan to finish the upcoming review of the International Monetary Fund (IMF) plan.
As of right moment, discussions for the ninth review appear to have halted due to a few earlier requirements of the Washington-based lender.
At the same time, the government has also been unable in obtaining crucial support from allies.
The struggle has left policymakers in Pakistan scrambling to arrange foreign exchange amid heightened worries over the country’s debt payments and ability to finance imports.
However, Finance Minister Ishaq Dar reiterated that Saudi Arabia “is expected to beef up its deposits in Pakistan in a few days.”
In a press conference, he said that a rollover “is not an unusual thing”.
“All nations of the world opt for borrowing new money to pay old liabilities or they opt for rollover. We are opting for rolling over of deposits,” said Dar.
Last week, he said “there is no chance that Pakistan will default“, while admitting the country’s economy remained in a “tight spot”.
