Pakistan’s foreign exchange reserves have reached a 28-month low since December 2019. As per the central bank’s data, the country’s total foreign reserves, including net reserves of commercial banks, stands at $16.375 billion after declining from $178 million on a week-on-week basis. The SBP forex reserves declined by $190 million to $10.308 billion during the week that ended on 6th May.
The forex reserves declined to a 28-Month low
As per currency experts, the forex reserves declined due to the high import payments that had escalated the demand for the dollar. The total import bills of Pakistan recorded an increase of 49 percent to $58.87 billion during the first nine months of the current fiscal year as compared with $39.49 billion in the corresponding period of the last fiscal year. The high levels of imports have caused a trade deficit of 70 percent which swelled to $35.39 billion during the first nine months of the current fiscal year as compared with the deficit of $20.8 billion in the corresponding months of the last fiscal year.
Samiullah Tariq, the head of research at Pak-Kuwait Investment Company, said; “The decline in reserves is nominal. However, in terms of imports cover we are lower than 3 months, and we have to go into the IMF program to stabilize the reserves.” The new Shehbaz-led government had approached the International Monetary Fund (IMF) and the Saudi government for the bailout packages which will require the present government to cut the costly energy subsidies, and increase petroleum and electricity prices to get the nod from the IMF for the release of the next loan tranche.
Pakistan is likely to get a $2.5 billion loan from ADB
According to the statement issued by the Ministry of Finance; “The ADB indicated the additional support of $2.5 billion for the next fiscal year, from which $1.5 billion to $2 billion can be available in the ongoing calendar year.” Minister of State for Finance and Revenue Dr. Aisha Ghous Pasha said; “Pakistan is facing various fiscal and monetary challenges but the present government is keenly working on various structural reform measures to bring back the economy on an inclusive and sustainable growth path.”
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