After six weeks: SBP-held foreign exchange reserves rise $107mn, now stand at $4.02bn

Foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $107 million, clocking in at nearly $4.02 billion as of June 9, data released on Thursday showed.

This is the first increase in reserves after six weeks. 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 $9.38 billion. Net foreign reserves held by commercial banks clocked in at $5.36 billion.

“During the week ended on June 9, 2023, SBP reserves increased by $ 107 million to $4,018.7 million,” said the SBP.

Last week, SBP’s foreign exchange reserves decreased by $179 million, clocking in at nearly $3.91 billion.

Earlier, Pakistan’s reserves got a boost after the country received $300 million from the Industrial and Commercial Bank of China Ltd (ICBC), the last of three disbursements.

Cumulatively, Pakistan received $2 billion from Chinese institutions. This includes $700 million from the China Development Bank and $1.3 billion from ICBC.

Moreover, China also rolled over a $2-billion loan, lending further support to Pakistan’s faltering dollar reserves.

The critical level of foreign exchange reserves underscores the need for revival of the stalled programme with the International Monetary Fund (IMF).

Earlier on Thursday, IMF expressed dissatisfaction with the budget proposals announced by Finance Minister Ishaq Dar for fiscal year 2023-24, calling them a missed opportunity to broaden the tax base while criticising the new amnesty scheme that “creates a damaging precedent”.

“The draft FY24 Budget misses an opportunity to broaden the tax base in a more progressive way,” Esther Perez Ruiz, the IMF Resident Representative for Pakistan, told Business Recorder.

Perez Ruiz said the IMF remains engaged to discuss policies to maintain stability, and “it stands ready to work with the government in refining this budget ahead of its passage”.