The foreign exchange reserves of the State Bank of Pakistan (SBP) reduced by USD 784 million and reached a nearly four-year low of USD 6.72 billion during the week that ended on December 2, Dawn reported citing the central bank.
The central bank data noted that the State Bank of Pakistan's reserves were recorded below this level during the week that ended on January 18, 2019, as it stood at around USD 6.64 billion. Net foreign reserves held by commercial banks have now reached USD 5.867 billion, which implies that Pakistan's total liquid foreign reserves stand at USD 12.58 billion, as per the Dawn report.
Ever since PML-N came into power in April, bolstering the foreign exchange reserves has remained the top agenda of the Prime Minister Shehbaz Sharif-led government. However, SBP's reserves have reduced by over USD 4 billion from around USD 10.9 billion, according to the news report.
According to an analyst, a fall in reserves could make it difficult for Pakistan to repay foreign loans. The central bank stressed that the fall in foreign exchange reserves has been recorded due to a payment of USD 1 billion against the maturity of Sukuk (Islamic bonds).
A senior analyst, who wanted to remain anonymous, however, said that the USD 6.7 billion reserves were not calculated after the payment for bonds, as per the Dawn report. Meanwhile, State Bank of Pakistan Governor Jameel Ahmed in a podcast on Thursday said that inflows remained at USD 4 billion during the last five months.
Ahmed further said that the figure is expected to increase in the second half of the current fiscal year which ends in June 2023. In an interview, Ahmed revealed that SBP has made the payment of USD 1 billion and another USD 1.2 billion to two commercial banks, which he stressed have agreed to give the same amount in a few days, as per the Dawn report.
Analysts and researchers have raised concerns regarding Pakistan's inability to pay back foreign loans. During the ongoing fiscal year, the frequent concerns have depressed the market and the exchange rate has remained unstable.
Pakistan is expecting another tranche from the International Monetary Fund (IMF). However, the ninth review talks have been delayed due to IMF's criticism over an increased fiscal deficit.
On December 7, Pakistan's Finance Minister Ishaq Dar held meetings with three IMF shareholders for support in seeking USD 7 billion economic bailout package, as per the Dawn report. Dar and his team held meetings with Islamabad-based top diplomats of the US, China, and the UK, Dawn reported.
( With inputs from ANI )
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