KARACHI: the State Bank of Pakistan’s foreign exchange reserves fell $294 million to an alarming level of $5.82 billion, data on Thursday showed.
This is the lowest level of SBP-held reserves since April 2014.
As of December 16, 2022, the country has $11.71 billion in liquid foreign reserves. There were $5.89 billion in net foreign reserves held by commercial banks.
“During the week ended on Dec 23, 2022, SBP’s reserves decreased by $294 million to $5.82 billion due to external debt repayment,” said the SBP.
Last week, foreign exchange reserves held by the SBP had fallen $584 million to $6.12 billion.
The SBP’s declining foreign exchange reserves, which were approximately $18 billion at the beginning of the year but have significantly decreased over the past 12 months, highlight the pressing need for Pakistan to finish the upcoming review of the International Monetary Fund (IMF) program.
As of right now, 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 country has also failed to secure much-needed funding from friendly countries.
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 on Wednesday that “there is no chance that Pakistan will default”, while admitting the country’s economy remained in a “tight spot”.
“Conditions are tight, but Pakistan will move forward. Pakistan will not default,” he said. “I admit that we do not enjoy the same level of foreign exchange reserves ($24 billion) we left back in 2016. But that is not the government’s fault, the fault is in the system, and we must ensure that every stakeholder takes part in carrying the country forward.”
