SBP-held foreign exchange reserves go over $10bn after Chinese loan

Foreign exchange reserves held by the State Bank of Pakistan (SBP) received a boost after proceeds of the CDB loan amounting to RMB 15 billion (roughly $2.3 billion) were received by the central bank, with the amount standing at $10.3 billion as of June 24, revealed data released on Thursday.

Total liquid foreign reserves held by the country stood at $16.2 billion with net foreign reserves held by commercial banks clocking in at $5.9 billion.

"During the week ended on 24-Jun-2022, SBP received proceeds of CDB loan amounting to RMB 15 billion. After accounting for external debt repayment, SBP’s reserves increased by $2,071 million to $ 10,309.0 million," said the SBP.

Last week, Finance Minister Miftah Ismail said the roughly $2.3-billion loan from China has been credited into the SBP account, which would help prop up foreign exchange reserves.

“I am pleased to announce that Chinese consortium loan of RMB 15 billion (roughly $2.3 billion) has been credited into SBP account today, increasing our foreign exchange reserves,” said Miftah in a tweet.

Later, the SBP also confirmed that it had received the Chinese consortium loan of RMB15bn.

A low level of foreign exchange reserves has been a source of headache for economic policymakers who have been knocking harder on the doors of the International Monetary Fund (IMF) for revival of Pakistan's Extended Fund Facility (EFF).

Critical level: SBP-held foreign exchange reserves plummet to $8.24bn

Just before the finance minister's announcement, foreign exchange reserves held by the SBP had decreased a massive $748 million on a weekly basis, falling to a critical $8.24 billion as of Jun 17, 2022.