Central Bank Reserves Surge To Over $9bn

The SBP reserves increased by $1.114bn to $9.1203bn, mainly due to the receipt of $1.1bn from the IMF as the final tranche.

Central Bank Reserves Surge To Over $9bn

Foreign reserves held by the State Bank of Pakistan (SBP) rose to $9.12 billion following the release of the final tranche of a $1.1 billion loan from the International Monetary Fund (IMF) under the short-term accord. 

The SBP released a statement on Thursday regarding the present status of the country's liquid foreign reserves following the IMF inflow, noting that the central bank's reserves remained at $9.12 billion in the week ending May 3.

Meanwhile, commercial banks' net foreign reserves totaled $5.3 billion, raising the country's total forex reserves to $14.45 billion, a nearly two-year peak last seen over $9 billion in mid-July 2022. 

The SBP reserves ascended by $1.114 billion to $9.1203 billion, "mainly due to the receipt of $1.1 billion from the international lender as the final tranche" under the loan program, according to the statement. 

Although the central bank received SDR 828 million (about $1.1 billion) from the global lender last month, the SBP stated that the amount will be recorded in foreign exchange reserves for the week ending May 3. 

The new tranche was the third and final installment of a $3 billion stand-by arrangement (SBA) struck between the country and a foreign lender last summer to avoid a default.

Meanwhile, Finance Minister Muhammad Aurangzeb indicated that an IMF delegation will arrive in Islamabad in mid-May to begin discussions on a fresh bailout. 

He said that the government may have a staff-level consensus on the new program by the beginning of July. The Fund and the government are already in discussions about the increased financing. 

The country's economy is suffering with a fragile balance of payments because it must repay about $24 billion in debt and interest over the next fiscal year—an amount that much exceeds the central bank's foreign currency reserves.