The State Bank of Pakistan‘s (SBP) foreign exchange reserves climbed by $30 million to $4.46 billion as of April 21, according to figures released on Thursday. The country’s total liquid foreign reserves are $10.02 billion. The aggregate figure remains critical, at about a month’s worth of import cover.
SBP’s Report
The country’s total liquid foreign reserves were $10.02 billion. Commercial banks’ net foreign reserves totaled $5.56 billion.
“During the week ended April 20, 2023, SBP reserves increased by $30 million to $4,462.8 million,” according to an SBP statement. SBP’s reserves climbed by $394 million last week.
Previously, Finance Minister Ishaq Dar announced the receipt of $300 million from the Industrial and Commercial Bank of China Ltd (ICBC), the third and final installment.
Pakistan has received a total of $2 billion from Chinese entities. The China Development Bank contributed $700 million, while ICBC contributed $1.3 billion.
Furthermore, China has extended a $2 billion loan, providing additional help to Pakistan’s dwindling dollar reserves.
The low level of foreign exchange reserves highlights the importance of restarting the delayed programme with the International Monetary Fund (IMF).
While Pakistan is now negotiating its rebirth, the IMF has stated that it hopes to secure the required finance assurances as soon as possible in order to complete the 9th Extended Fund Facility (EFF) review successfully.
The rupee is suffering as a result of the delay in reaching an agreement with the IMF.
A lack of foreign currency reserves has also put strain on the economy, which is highly reliant on imports to keep its engines running.
While the SBP has imposed some restrictions on inward shipments, reducing the current account deficit, many enterprises have been forced to close or reduce operations as policymakers try to arrange dollar inflows. Due to import restrictions, Pakistan reported a large current account surplus of $654 million in March.
To read our blog on “Deposits leaving US banks is biggest economic crisis in 10y,” click here
