Foreign exchange reserves held by the State Bank of Pakistan (SBP) increased $276 million to $3.19 billion, data released on Thursday showed.

This is the first increase in reserves after three weeks.

Total liquid foreign reserves held by the country stood at $8.7 billion. Net foreign reserves held by commercial banks stood at $5.51 billion.

Highly critical: SBP-held foreign exchange reserves fall $170mn, now stand at mere $2.92bn

“During the week ended on February 10, 2023, SBP’s reserves increased by $276 million to $3,192.9 million,” the SBP said in a statement.

Last week, foreign exchange reserves held by the SBP dropped $170 million to a mere $2.92 billion.

The central bank reserves, which stood at nearly $18 billion at the start of 2022 but have undergone significant depletion in recent months, underscore the urgent need for Pakistan to complete the next review of the International Monetary Fund (IMF) programme.

An IMF delegation left Pakistan last Friday without a staff level agreement. However, Finance Minister Ishaq Dar notified the receipt of Memorandum of Economic and Financial Policies (MEFP) before Pakistan looked to swiftly implement key prior conditions of the bailout including hiking gas tariffs and imposing additional taxes.

Talks on the ninth review have remained stalled since November last year over prior conditions of the Washington-based lender that has called for a market-determined exchange rate, resolution of issues within the power sector, and a roadmap for achieving tax targets.

While the country has moved to curb dollar outflow through restrictions on imports, many businesses have either scaled back or shut down operations after their inability to open letters of credit (LC) amid the foreign currency shortage.

At the same time, policymakers are scrambling to secure inflow of dollars without much success.

The entire scenario has put Pakistan’s economy in severe distress with the rupee hitting fresh lows this year before appreciating in recent days.