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Pakistan’s foreign exchange reserves dropped $1.2 billion to $4.3bn as of January 6, the central bank said on Thursday, leaving the country with barely three weeks’ worth of import cover.
The drop was due to external debt repayments, the State Bank of Pakistan (SBP) said in a statement.
Net foreign exchange reserves held by commercial banks stood at $5.8bn, and total liquid reserves at $10.1bn, the bank added.
Despite recent compression measures by the government, Pakistan’s import bill for goods was $5.1bn per month in both November and December, according to the Pakistan Bureau of Statistics.
The main imports are critical energy-related fuels.
The country is currently in the midst of a severe cash crunch. The falling reserves have already deeply devalued the local currency against the US dollar and other major currencies.
Foreign debt servicing is the most troubling question for the PMLN-led coalition government facing a serious threat of default. Several attempts to restart talks with the International Monetary Fund (IMF) for the release of the next tranche have so far remained unfruitful.
However, earlier today the United Arab Emirates (UAE) agreed to roll over an existing loan of $2bn and give an additional loan of $1bn to Pakistan.
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Comments (59) Closed
Jan 13, 2023 12:00am
Time to cut and eat grass. Which is the tastiest variety?
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Jan 13, 2023 12:22am
Well done neutrals. It's about time to handover the nuclear assets.
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Jan 13, 2023 12:42am
No problem. Let Pakistanis go without dinner on Fridays to conserve food and foreign reserves.
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Jan 13, 2023 01:06am
Now wonder why all of sudden PDM crooks have gone silent and Dar has gone into hibernation! Shame on neutrals for installing criminals and destroying this country….
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Jan 13, 2023 01:08am
Instead of begging, please bring the looted wealth of PDM looters
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Jan 13, 2023 01:29am
The nation needs to change its import habits. It cannot go on like this.
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Jan 13, 2023 01:30am
The most worrying aspect is the drying remittances from overseas Pakistanis who are now resorting to off Banking transactions to get favorable open market exchange rate. Default is the only way forward.
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Jan 13, 2023 01:45am
Afghanistan has foreign reserves of $9 billion
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Jan 13, 2023 01:46am
The opening line states “ Pakistan’s foreign exchange reserves dropped $1.2 billion to $4.3bn”
Shouldn’t it be “…dropped to $1.2bn from $4.3bn?
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Jan 13, 2023 01:59am
Wheres the magic wand Mr Dar?
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Jan 13, 2023 02:03am
BAJWA and Establishment gets all the credit for bringing the country to this stage .
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Jan 13, 2023 02:07am
What was it that Zak says about India where 90% live in poverty without toilets and a $10 trillion debt? Would love to hear his wisdom on this 3 weeks from now when the SBP reserves run out.
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Jan 13, 2023 02:09am
What to do when Govt realizes that the $9B "pledged" were all loans, not aid (free money). They have to be paid back, assuming that they are given in the first place.
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Jan 13, 2023 02:12am
Kashmir is a curse to Pakistan, they have spent all resources and energy to keep Kashmir as a priority. Give Kashmir to India and set priority to recovering the economy
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Jan 13, 2023 02:15am
If it's $10 billion, why go all around begging? It means Pakistan has enough and can survive well. I was just about to donate $100k, but since Pakistan has $10 billion, I would rather donate to Sudan.
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Jan 13, 2023 02:18am
.... meanwhile....the President of Pakistan Alvi, urged ex-pat Pakistanis to raise the issue of Kashmir in their specific countries to liberate it from India. With priorities like this from the top most leader, is it any wonder that Pakistan is in such a mess?
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Jan 13, 2023 02:29am
None of these steps will do anything until and unless Pakistan takes some fundamental changes such as (1) real education instead of religious education, (2) collecting taxes from the well off who are not paying taxes and (3) cutikng military spending. The military is too large for the economy of the country - it is apparently half the size of India for an Econ which is 11 times larger. It is not sustainable.
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Jan 13, 2023 02:30am
Thanks neutrals!
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Jan 13, 2023 02:41am
Thank you IK
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Jan 13, 2023 02:46am
If you can’t run the business, just close the shop
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Jan 13, 2023 03:15am
Those pledges better turn into real money loans very soon, or else stuff will REALLY hit the fan!
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Jan 13, 2023 03:16am
We should import from neighboring countries and export their need from our country to upset import cost. Have to cut military spending by 75%. Only way to survive.
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Jan 13, 2023 03:19am
PDM dishonestly removed PTI by using inflation slogan and look where they are.
Accout deficit and reserves were far better thalen. Development work has been cancelled. Billo making billions of RS worth of foreign trip. PM attending Geneva conference just to burden us with more loans.
Unstoppable corruption in highway project in Sindh, where civil officers directly deposited money to their personal bank.
Terrorism on the rise, no relief for poor flood effected people.
You call this governance?
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Jan 13, 2023 03:35am
bubye pakistan. lights out. Meantime keep yapping about kashmir.
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Jan 13, 2023 03:58am
Dar has shown no interest to implement IMF suggested economy reforms and thus no loan been forwarded. Dar wants to take credit for bringing on default.
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Jan 13, 2023 04:08am
So in 3 weeks time SBP reserves will be zero? Need loans fast.
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Jan 13, 2023 04:29am
Forget it. We are rolling in loans now
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Jan 13, 2023 04:48am
We subcontinent people need to think. Is this what we were trying to achieve in 1947? Are we gng in right direction. Is enmity of pak n India of any use to common man of either side. Is kashmir boundary line such a big problem that we both r almost beggars with common man struggling for basic needs but we won't talk n solve?
No religion promotes Hate. Hadn't we all lived together since hundreds of years. Can't we coexist as good neighbour's? We all 9n both sides r wrong and we need to accept
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Jan 13, 2023 04:49am
I wish pak comes out of this financial mess asap and we all have resolve our differences n bring peace n happiness ess to common man on all sides.
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Jan 13, 2023 04:55am
The corrupts have destroyed this country.
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Jan 13, 2023 05:01am
Sinking ship! Its time to settle issues with India for survival.
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Jan 13, 2023 05:32am
Still better than PTI. During IK time only 1 week cover was left
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Jan 13, 2023 05:47am
Within 3 weeks this will be replaced by fresh 7-8b dollar loans ! Seriously why cash rich China not helping ! A 30-40b ease would easily pull Pakistan out of for few years !With 3.2 Trillion in reserves they prefer Pak to exist just to fight India on their behalf !! If Pak somehow focus on prosperity they fear they loose a proxy against India !! Its just that Pakistani generals and politicians dont get it !
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Jan 13, 2023 05:48am
Biden is punishing Pakistan for their perceived Pakistani help to the Taliban.
Whereas it's the Americans who left Afghanistan for a second time after making a mess, for Pakistan to deal with.
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Jan 13, 2023 05:50am
Why is this news? Nothing new here!
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Jan 13, 2023 05:51am
Stop complaining and start printing some money.
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Jan 13, 2023 05:51am
Atom bomb can be feed to massses
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Jan 13, 2023 05:54am
So what happens after three weeks? Nation shuts down?
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Jan 13, 2023 06:05am
Why can't as just do a planned soft default now when we have enough reserves left instead of waiting for the money to run out?
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Jan 13, 2023 06:21am
This is a good news. Should quickly reach 0
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Jan 13, 2023 06:28am
Wonder why SBP keeps declaring reserves held by other banks !!
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Jan 13, 2023 06:45am
A neuclear power country with foreign reserves just about 4 billion is for surly heading for bankruptcy.
Not a healthy sign.
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Jan 13, 2023 06:51am
If you want to know why Pakistan is in this state--look no further than your president Alvi, who last week was directing youth to protest on Kashmir on Feb 5th. What do you expect? This is a country that does not have its priorities right!
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Jan 13, 2023 07:05am
Much worse to come
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Jan 13, 2023 07:09am
The ship called Pakistan is sinking.
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Jan 13, 2023 07:17am
China need to help us. Stop taking our money.
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Jan 13, 2023 07:17am
Thank you PDM
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Jan 13, 2023 07:19am
Cpec anybody
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Jan 13, 2023 07:22am
Achievements after 75 years of independence. Nuclear bomb, 8th biggest army, 6th biggest population and no money
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Jan 13, 2023 08:06am
This dwindling state of financial affairs of the imported PDM has been well known for quite some time
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Jan 13, 2023 08:25am
Surprisingly we still have surplus? Not for too long, CPEC loan payments are due soon
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Jan 13, 2023 08:25am
Pakistan will surely default and it is because of misplaced national priorities and corrupt elite politicians and Generals.
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Jan 13, 2023 08:30am
SBP forex is dwindling and govt is taking trips abroad in expensive hotels and lunches
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Jan 13, 2023 08:38am
How long will this continue... the bubble is getting bigger and very delicate. It can burst anytime...
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Jan 13, 2023 08:42am
When there is none there is no meaning in publishing these figures. All that is foreign deposit.
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Jan 13, 2023 08:42am
“The drop was due to external debt payment”
Of course the debt taken has to be repaid one day with interest. Somehow Pakistani leaders act as if repaying debt is doing a favour to the lenders.
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Jan 13, 2023 08:45am
By end of March...Pak will stare & realise what zero means
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Jan 13, 2023 08:53am
Neutrals and the selected political goons will place more orders for new BMWs, now that funds have been pledged.
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Jan 13, 2023 08:53am
With this camouflaged meagre reserves any notion, who want to bring real changes, would have declared Default. But chest thumping and ego have prevented declaring it so far.
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