KARACHI: Foreign exchange reserves of the State Bank of Pakistan (SBP) hit a new nine-year low of $3.678 billion during the week ended on Jan 20.

The SBP on Thursday said that its forex holdings decreased by $923m during the week due to external debt repayments.

The government has practically surrendered to the IMF conditions for the revival of the loan programme amid fast-dwindling SBP reserves are even not sufficient to cover imports for three weeks.

More than 9,000 containers are stuck at the ports waiting to be paid for clearance. Also, ships carrying essential commodities including petroleum products, LNG and soyabean are awaiting payments but the empty-handed government is looking for inflows.

The government has met the key pre-conditions of the fund including a market-based dollar-rupee exchange parity and high-interest rate and is likely to impose 17pc general sales tax on diesel and petrol within a week.

The economy is in bad shape but the external front is facing the worst situation.

The country’s total reserves were $9.5bn down by $990m while the commercial banks’ holdings fell by $68m to $5.8bn during the week.

Published in Dawn, January 27th, 2023