Forex reserves plunge $354 after six week rise


Karachi: The forex reserves of Pakistan plunged heavily by $354.4 million to settle at $5.57 billion — not even enough to cover one month’s imports — the State Bank of Pakistan (SBP) reported Thursday.

The data shared by the central bank showed that during the week that ended on March 24, 2023, the SBP-held forex reserves fell sharply.

However, those held by commercial banks witnessed an increase of $31 million to clock in at $5.571 billion.

Cumulatively, the net reserves plunged $323.3 million to settle at $9.816 billion during the period under review.

Pakistan’s economy continues to dwindle amid financial woes, with the authorities struggling to strike a staff-level agreement with the International Monetary Fund (IMF).

The Washington-based lender has been in talks with the Pakistani authorities since end-January to resume the $1.1 billion loan tranche held since November, part of a $6.5 billion Extended Fund Facility (EFF) agreed upon in 2019.

Though the country has avoided default, it has been unable to make payments for imports. Pakistan’s external payments (mostly debt servicing) are the real cause of concern for both the country and the IMF.

Speaking on the floor of the Senate on Thursday, Finance Minister Ishaq Dar said that Pakistan didn’t delay a single day in repayments.

“All technical discussions have been completed, an agreement nearing with the International Monetary Fund (IMF),” the finance minister said.

Ishaq Dar said that the foreign exchange reserves were improving. “We are trying to take the reserves to 13 billion dollars level by June,” he said.

He said that the IMF was demanding what was committed during the fifth and sixth review of the bailout, adding that the global lender wanted guarantees of $3 billion from the UAE and Saudi Arabia.

Similarly, China — the long-standing friend of Pakistan — was also working on a request from cash-strapped Pakistan to roll over a $2 billion loan that matured last week.