KARACHI: The official reserves of State Bank of Pakistan (SBP) have reduced by $85 million to $10.889 billion by week ended April 17, 2020, the central bank said on Thursday.
The SBP attributed this decline to government external debt payments of $145 million.
The SBP said that on April 20, 2020, it received $1.39 billion from International Monetary Fund (IMF) under the Rapid Financing Instrument (RFI) to address the economic impact of the Covid-19 shock.
These funds will be part of SBP weekly reserves data as of 24-April-2020, to be released on 30-April-2020.
The total liquid foreign reserves held by the country stood at $17.300 million on April 17, 2020. The reserves held by commercial banks were at Rs6.41 billion.
Analysts believe the inflow from the IMF under the Rapid Financing Instrument will provide temporary support to Pakistan’s external account position and help stabilize the foreign exchange market amid growing economic uncertainty caused by the Covid-19 pandemic. Economists said the additional funds are expected to strengthen investor confidence and support essential imports, including medical equipment and food supplies.
However, they also warned that maintaining adequate foreign exchange reserves will remain a major challenge due to weak exports, lower remittances risks, and external debt obligations. Market experts stressed the need for prudent fiscal management and structural reforms to ensure long-term stability in the country’s balance of payments position.
