KARACHI: The official foreign exchange reserves of State Bank of Pakistan (SBP) inched up by $65 million to reach $3.26 billion by week ended February 17, 2023, according to an official statement issued on Thursday.
The foreign exchange reserves of the SBP were at $3.193 billion a week ago i.e. February 10, 2023.
READ MORE: Foreign exchange reserves of Pakistan rise to $8.70 billion
Pakistan is facing massive shortfall of foreign exchange to support its balance of payment. The government is striving hard to strike a deal with the International Monetary Fund (IMF) for obtaining a tranche of $1.2 billion under Extended Fund Facility (EFF).
However, in a positive development about $700 million from China will transferred anytime, which will help in improving stock of the foreign exchange reserves.
READ MORE: Pakistan’s official foreign exchange reserves fall below $3 billion or nine-year low
A day earlier, Finance Minister Ishaq Dar stated that China Development Bank (CDB) approved a loan of $700 million for Pakistan.
“Formalities completed and the board of CDB has approved the facility of $700 million for Pakistan. This amount is expected to be received this week by the State Bank of Pakistan (SBP) which will shore up its foreign exchange reserves,” according to a Tweet of the finance minister.
READ MORE: SBP’s foreign exchange reserves drop to dangerous level of $3.09 billion
The current level of the official foreign exchange reserves are only to provide import cover for about two weeks or 19 days.
The import bill for the month of January 2023 has been recorded at $4.856 billion, as per Pakistan Bureau of Statistics (PBS). The benchmark foreign exchange reserves of a central bank should be at a level to provide three months import cover.
The official foreign exchange reserves of SBP fell sharply to an almost nine-year low. Previously, the official reserves of the SBP were seen at this level at $3.19 billion in February 2014.
READ MORE: Pakistan’s official forex reserves shrink to only $3.68 billion
The central bank attributed the decline in foreign exchange reserves to scheduled external repayment.
The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by the week ended August 27, 2021. Since then the official reserves of the SBP dropped by $16.888 billion.
The total foreign exchange reserves of the country have increased by $24 million to $8.726 billion by week ended February 17, 2023 as compared with $8.702 billion a week ago i.e. February 10, 2023.
The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $18.502 billion.
On the other hand, the foreign exchange reserves of the commercial banks fell by $41 million to $5.468 billion by the week ended February 17, 2023 when compared with $5.509 billion a week ago.
