Pakistan’s foreign exchange reserves have declined by $195 million to $9.565 billion due to repayment of foreign debt, State Bank said on Thursday.
According to the State Bank of Pakistan (SBP), the country’s foreign exchange reserves fell by $195 million to $9.565 billion by the week ending on April 07, 2023, as compared to $9.76 billion a week earlier i.e., March 31, 2023.
READ MORE: Country’s foreign exchange reserves slip to $9.76 billion: SBP
The country’s foreign exchange reserves have declined by $17.663 billion since reaching an unprecedented high of $27.228 billion on August 27, 2021.
Despite this decline, the State Bank of Pakistan’s foreign exchange reserves still exceed the level required to provide more than one month’s worth of import cover.
READ MORE: Pakistan’s foreign exchange reserves drop to $9.816 billion
The official reserves of the State Bank of Pakistan fell by $170 million to $4.038 billion during the week ending on April 07, 2023, compared to $4.208 billion in the previous week.
The government is working to secure a $1.2 billion tranche under the Extended Fund Facility (EFF) from the International Monetary Fund (IMF) to address the country’s shortage of foreign exchange.
Nonetheless, the country has received substantial foreign inflows from China, which has helped to improve its stock of foreign exchange reserves.
READ MORE: Pakistan’s foreign exchange reserves rise to $10.14 billion
In addition to the measures already taken, the government could consider further efforts to boost exports, such as providing incentives to export-oriented industries and improving the overall business climate to attract foreign investment.
Strengthening the domestic economy could also help reduce the country’s reliance on imports, which would help address the trade deficit. Improving the tax collection system and reducing corruption could also help increase government revenues, which could be used to repay debts and reduce the need for external borrowing.
READ MORE: Pakistan’s weekly forex reserves move up by $93 million
Overall, Pakistan’s balance of payment crisis is a complex issue that requires sustained efforts and effective policies to address. While short-term measures such as currency devaluation and import restrictions may provide some relief, long-term solutions such as boosting exports and strengthening the domestic economy are necessary to address the root causes of the crisis.
