Pakistan's Total Liquid Foreign Reserves Inch Past $10 Billion Threshold

Pakistan's Total Liquid Foreign Reserves Inch Past $10 Billion Threshold
The value of Pakistan's total liquid foreign exchange reserves, held by the central bank and other commercial banks, has increased to a little more than $10 billion in the past week.

According to State Bank of Pakistani (SBP), during the week that ended on March 17, 2023, foreign exchange reserves held by the government increased by $280 million to $4.598 billion. This has been attributed to receipt of commercial loans amounting to $500 million.

The value of foreign exchange reserves held in deposits by commercial banks have also increased marginally by $13 million to $5.545 billion dollars.

However, Pakistan's total foreign exchange reserves — currently at $10.1 billion — are barely enough for one month of import cover. The indebted South Asian country is struggling to finance its expenditures as it is engaged with the International Monetary Fund (IMF) in desperate negotiations to secure financial assistance from the lender of last resort and from other friendly countries.

The PDM coalition government and IMF have been negotiating since early February to finalise an agreement that would release a tranche amounting to $1.1 billion, from a $6.5 billion bailout programme agreed upon in 2019, to a cash-strapped Pakistan.

The PDM government has already implemented several fiscal measures — including devaluing the rupee, rolling back subsidies, and raising energy prices — as preconditions for the agreement.