KARACHI: The country’s total liquid foreign exchange reserves further declined by $177 million during the last week.
According to the weekly foreign exchange reserves report issued by State Bank of Pakistan (SBP) on Thursday, the total liquid foreign exchange reserves held by the country stood at $16.376 billion as of May 6, 2022 down from $16.553 billion as of April 30, 2022.
During the week under review, SBP reserves decreased by $190 million to $10.309 billion due to external debt repayments. However, net foreign exchange reserves held by commercial banks increased by $6.067 billion, up by $13 million.
The country is facing a severe crisis of balance of payment and immediately needs healthy foreign inflows to build the depleting foreign exchange reserves. Current level of foreign exchange reserves is sufficient for the import of about one and half months.
The government is making efforts to revive the Extended Fund Facility (EFF)—an IMF loan programme of $6 billion. In addition, the newly set-up coalition government is in process of rollover of Chinese loan worth $2.4 billion matured last month.
Pakistan has made several requests to the Chinese government for the rollover of the loan and the government of Pakistan is hoping that China will rollover the debt very soon.
Pakistan’s former Foreign Minister Shah Mahmood Qureshi also visited China in March to talk with Chinese officials for a deposit of foreign exchange with Pakistan. Economists believed that the Chinese loan rollover will provide a major financial relief to the country’s cash-strapped economy. The government has also asked Saudi Arabia for deposits with Pakistan for the support of foreign exchange reserves. The declining foreign exchange also had a negative impact on the exchange rate and the Pak Rupee is under pressure for the last one week. The dollar was traded at Rs192.50 in the open currency market on Thursday.
Copyright Business Recorder, 2022
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