KARACHI: Pakistan\u2019s foreign exchange reserves held by the central bank fell below $6 billion, threatening to further exacerbate the country\u2019s economic woes unless policymakers urgently secure financing from the International Monetary Fund and friendly countries.<\/p>\n
The foreign reserves decreased by $294 million to $5.8 billion as of December 23, the State Bank of Pakistan said in a statement on Thursday. The reserves hit the lowest level since April 2014.<\/p>\n
High external debt repayments and lack of foreign currency inflows have further eroded the country\u2019s reserves, which are now equal to just five weeks of imports.<\/p>\n
Pakistan\u2019s total reserves declined $293 million to $11.7 billion. The reserves of commercial banks, however, inched up $1 million to $5.9 billion.<\/p>\n
The amount of reserves has rapidly decreased to a dangerous level, according to analysts. The official reserves may exhaust very soon if urgent arrangements are not made for the cash dollars.<\/p>\n
A decrease in these foreign exchange reserves poses a threat to debt repayment as well as to imports. The low levels have raised a red flag as the government is expected to make debt repayments of over $1 billion to two foreign commercial banks early next month. The IMF\u2019s loan programme has been pending since September. China and Saudi Arabia have so far abstained from lending money to Pakistan in the absence of the IMF\u2019s cover.<\/p>\n
\u201cThe reserves are at a risky level, and if the necessary steps are not made to secure inflows as quickly as feasible, we will soon run out of reserves. Reviving the IMF programme and announcing agreements with friendly countries for fresh funding are necessary,\u201d said Dr Salman Shah, the former finance minister.<\/p>\n
However, finance minister Ishaq Dar asserted that the government has complied with all IMF requirements, including the fuel tax (also known as the petroleum development levy). There is no possibility of default as the government has managed to arrange the $31-32 billion required for FY2023 and foreign reserves will be in a better position by the end of this fiscal year, according to Dar.<\/p>\n
Fahd Rauf, the head of research at Ismail Iqbal Securities, said that everything depends on Saudi flows and the IMF and that he finds the scenario regarding the deteriorating external finances to be \u201cvery worrying.\u201d<\/p>\n
\u201cThe government needs to act quickly. Either take painful steps or step down and hands over to caretakers,\u201d Rauf added.<\/p>\n
The country\u2019s economy is under growing pressure as reserves deplete fast. The central bank has still strong controls over imports due to the dollar crunch. Many businesses have halted operations due to a lack of raw material amid import controls.<\/p>\n","protected":false},"excerpt":{"rendered":"
KARACHI: Pakistan\u2019s foreign exchange reserves held by the central bank fell below $6 billion, threatening to further exacerbate the country\u2019s economic woes unless policymakers urgently secure financing from the International Monetary Fund and friendly countries. The foreign reserves decreased by $294 million to $5.8 billion as of December 23, the State Bank of Pakistan said […]<\/p>\n","protected":false},"author":1,"featured_media":111127,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-111126","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national"],"_links":{"self":[{"href":"https:\/\/tns.world\/index.php?rest_route=\/wp\/v2\/posts\/111126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tns.world\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tns.world\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tns.world\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tns.world\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=111126"}],"version-history":[{"count":1,"href":"https:\/\/tns.world\/index.php?rest_route=\/wp\/v2\/posts\/111126\/revisions"}],"predecessor-version":[{"id":111128,"href":"https:\/\/tns.world\/index.php?rest_route=\/wp\/v2\/posts\/111126\/revisions\/111128"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tns.world\/index.php?rest_route=\/wp\/v2\/media\/111127"}],"wp:attachment":[{"href":"https:\/\/tns.world\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=111126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tns.world\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=111126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tns.world\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=111126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}