Pakistan’s foreign exchange reserves held by the central bank decreased by $170 million to $2.9 billion in the week ending on February 3, the State Bank of Pakistan (SBP) said on Thursday.
The country is locked in negotiations with the International Monetary Fund (IMF) to release much-needed money under a stalled bailout programme.
A successful outcome with the IMF would also help to release money from other platforms that are looking for a greenlight from the lender.
The SBP handout issued today said that the decrease was due to “external debt payments”.
Meanwhile, net foreign reserves held by commercial banks stood at $5.6bn, bringing the country’s total liquid foreign reserves to $8.5bn.
Arif Habib Ltd calculated that reserves were at their lowest since February 2014 and cover a little more than two weeks of imports.
Earlier in the day, Finance Minister Ishaq Dar said that matters between the government and the IMF were expected to be settled today.
Cash-strapped Pakistan has been holding talks with the IMF in a bid to unlock funds from a $7 billion bailout designed to ward off an economic meltdown. The talks are meant to clear the IMF’s 9th review of its Extended Fund Facility, aimed at helping countries with balance-of-payments crises.
The lender had set several conditions for resuming the bailout, including a market-determined exchange rate for the local currency and an easing of fuel subsidies. The central bank recently removed a cap on exchange rates and the government raised fuel prices by 16 per cent.