SBP-held forex reserves increase $18mn, now stand at $4.32bn

Foreign exchange reserves held by the State Bank of Pakistan (SBP) increased $18 million, clocking in at $4.32 billion as of March 10, data released on Thursday showed.

This is the fifth successive increase in central bank-held reserves on a weekly basis, but the overall number still stands at a critical level at around a month of import cover.

Total liquid foreign reserves held by the country stood at $9.85 billion. Net foreign reserves held by commercial banks clocked in at $5.53 billion.

“During the week ended on March 10, 2023, SBP’s reserves increased by $18 million to $4,319.1 million.,” said the SBP.

Last week, foreign exchange reserves held by the SBP increased $487 million on the back of another loan from China.

Finance Minister Ishaq Dar said on Thursday that the Ministry of Finance has completed documentation for the second disbursement of $500 million from the Industrial and Commercial Bank of China (ICBC).

“Out of Chinese ICBC’s approved rollover facility of $1.3 billion (which was earlier repaid by Pakistan to ICBC in recent months), documentation for second disbursement of $500 million has been completed by Finance Ministry for release of funds to the State Bank of Pakistan (SBP)!,” said Dar in a tweet.

Moreover, he added that the International Monetary Fund (IMF) was asking for the materialisation of commitments made by ‘friendly countries’ with Islamabad, which remains the “only delay” blocking the resumption of the stalled programme.

“At the time of previous reviews, certain friendly countries have made commitments to bilaterally support Pakistan. But IMF is now asking that they should actually complete and materialise those commitments.”

“That’s the only delay,” the finance minister told the Senate.

A delay in an agreement with IMF is taking a toll on the economy, particularly the rupee. A shortage of foreign currency reserves has put added pressure on the economy that relies heavily on imports to run its engines. While the SBP has put some curbs on inward shipments, reducing the current account deficit in the process, many businesses have been forced to either shut down or scale back operations as policymakers scramble to arrange dollar inflow.