State Bank reserves decline by $72m

Published May 19, 2023
US dollar slightly appreciated by 22 paise to Rs285.62 in the interbank market against the rupee on Thursday.—Reuters
US dollar slightly appreciated by 22 paise to Rs285.62 in the interbank market against the rupee on Thursday.—Reuters

KARACHI: The external debt repayments further slashed the foreign exchange reserves of the State Bank of Pakistan (SBP) by $72 million to $4.31 billion during the week ending on May 12, announced the central bank on Thursday.

While the fear of def­ault is haunting the country, the declining remittances and FDI inflows put the SBP’s reserves in a weaker position.

Miftah Ismail, the former finance minister, said on Thursday that the government is not aware of the true extent of the economic crisis.

Economist Ashfaq Hassan Khan said for the PDM government economic revival is the least priority as it is busy crushing its political rivals.

The grave situation with the declining foreign exc­hange reserves could put Pakistan in trouble part­i­cularly when the IMF is not ready to extend loans.

Independent economists and analysts believe that the country needs another package of loans from the IMF to avoid default in the next fiscal year as well. However, it looks that the Fund would not release the due $2.2bn under the existing $7bn EFF programme, set to expire on June 30.

The country’s total foreign exchange reserves again slipped to single digits at $9.937bn including $5.625bn holdings of commercial banks.

Meanwhile, the US dollar slightly appreciated by 22 paise to Rs285.62 in the interbank market against the rupee. The open market was calm with the greenback settled largely unchanged at Rs299.

Published in Dawn, May 19th, 2023

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