KARACHI: The central bank’s foreign exchange reserves declined by $63 million to $7.950 billion in the week ended February 23, due to foreign loan repayments, the State Bank of Pakistan reported on Thursday.
The country’s foreign reserves fell by $59 million, to $13.039 billion. However, commercial bank reserves climbed by $4 million, reaching $5.089 billion. The SBP’s reserves are sufficient to cover approximately two months of imports.
The country’s cash-strapped economy received a $3 billion bailout from the International Monetary Fund last summer. However, it is having difficulty stabilising due to record-high inflation, currency depreciation, and falling foreign exchange reserves.
Although the SBP’s reserves have expanded dramatically from $4.445 billion at the end of the last fiscal year to $7.9 billion as of February 23, experts and international rating agencies think the reserves are still insufficient given the nation’s expanding need for external financing.
The existing IMF stand-by arrangement will expire in April, and the incoming coalition government would most likely need further cash from the global lender.
Analysts believe that the SBP has been attempting to keep its foreign exchange reserves over $8 billion in order to maintain currency stability. However, certain external payments must be made to repay debt, return profits to overseas investors, and meet other responsibilities.
