From Zeeshan Mirza
KARACHI: Foreign exchange reserves held by the State Bank of Pakistan (SBP) fell to $3.91 billion due to external debt payments amid government efforts to revive stalled International Monetary Fund (MF) programme expiring this month.
The SBP said in a statement on Thursday that its reserves decreased by $179 million to $3.91 billion during the week ended on June 2, barely enough to provide controlled imports cover for one month.
The net foreign reserves held by commercial banks stand at $5.42 billion, $1.51 billion more than the reserves held by the central bank while the total foreign reserves held by the country stood at $9.3 billion as of Jun 2.
This is the sixth weekly drop in the foreign exchange reserves, with Pakistan seeing no signs of securing external financing any time soon amid political instability — which has had a huge impact on the deteriorating economy.
The $350 billion economy is in turmoil amid financial woes and the delay in an agreement with the IMF that would release much-needed funding crucial to avoid the risk of default.
The government has been in talks with the Washington-based lender since end-January to resume the $1.1 billion loan tranche that has been on hold since November, part of a $6.5 billion Extended Fund Facility (EFF) agreed upon in 2019.
Earlier today, Finance Minister Ishaq Dar said that the coalition government has shared its budget numbers with the IMF, hoping to unlock the ninth review as there are “no issues in the numbers”.
The government is under enormous pressure from the IMF to tighten the purse strings to unlock another last tranche of a vital bailout package.
Under the IMF’s terms, Pakistan had to do away with subsidies on energy and other sectors, allow the rupee to float against the US dollar, raise taxes and duties, and restrict imports.
