LAHORE – State Bank of Pakistan’s (SBP) foreign exchange reserves have reached $4,018.7 million after increasing by $107 million during the week ended on June 9, 2023.
As per the data released by SBP on Thursday, the net foreign reserves held by commercial banks stood at $5,359.5 million. As such, the total liquid foreign reserves held by Pakistan reached $9,378.2 million as of June 9, 2023.
Though this development is a good omen for the country facing the steep challenge of fast depleting foreign exchange reserves, the existing numbers are still critically low that provide only one month’s import cover.
Facing this critical challenge is really an uphill task for Pakistan that can be fulfilled by the revival of stalled IMF program. However, it looks really difficult after taking into account the reservations of IMF on taxation system and amnesty scheme in the proposed budget for fiscal year 2023-24.
IMF representative Esther Perez Ruiz stated that the proposed budget has missed an opportunity to broaden the tax base in a more progressive way.
“The long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable BISP recipients and carrying out development projects”, she stated while talking to a selective group of journalists.
She said that measures to address the energy sector’s liquidity pressures could have been included along with a broader budget strategy.
The IMF representative also criticized the proposed tax amnesty scheme that allows people to bring up to $100,000 from abroad without declaring their sources of earning, saying it was against IMF’s conditionality and governance agenda.
Despite reservations, Esther Perez Ruiz said that the IMF was ready to work with the government for refining the budget before its passage from the National Assembly.
