State Bank of Pakistan’s foreign exchange reserves have dropped to only $4.5 billion after the repayment of loans worth $1.2 billion to United Arab Emirates (UAE) banks, it emerged on Saturday.
This leaves the country with an import cover of only under a month, as Pakistan tries to curb imports amid dollar crunch, according to a report in ARY News.
A breakup shows Pakistan returned $600 million to Emirates Bank, while it repaid $420 million to Dubai Islamic Bank.
On Thursday, the central bank reported that foreign reserves had fallen to $5.6 billion as of December 30, 2022.
During the week ended on December 30, 2022, the forex reserves held by the central bank, dropped by $245 million to $5.57 billion — the lowest level since April 2014 — down from last week’s reserves of $5.821 billion.
The net foreign reserves held by commercial banks amount to $5.84 billion, with the total reserves clocking in at $11.42 billion.
The National Security Committee (NSC) recently agreed on undertaking concrete steps — including import rationalization as well as preventing illegal currency outflows and hawala business — in order to strengthen the economy.
Amid a crisis-like situation, Pakistan will have to repay approximately $8.3 billion in the shape of external debt servicing over the next three months (Jan-March) of the current fiscal year.
