In alarming news, Pakistan’s forex reserves plunged 16% to a dangerously low level of $3.08 billion — the lowest level of forex reserves since February 2014 — the State Bank of Pakistan reported Thursday.
According to the data shared by the central bank, during the week that ended on January 27, 2023, the SBP-held forex reserves fell sharply by more than $592 million. Similarly, those held by commercial banks also dropped by more than $119 million to clock in at $5.655 billion.
Cumulatively, the net reserves plunged $771.5 million to settle at $8.74 billion during the period under review.
Total liquid foreign #reserves held by the country stood at US$ 8.74 billion as of January 27, 2023.
For details https://t.co/WpSgomnKT3 pic.twitter.com/LE9eay1XU2— SBP (@StateBank_Pak) February 2, 2023
Pakistan is currently locked in negotiations with the International Monetary Fund (IMF) for the resumption of the Extended Fund Facility (EFF) program with the global lender. The successful negotiations between the two would see Pakistan receive $1.18 billion from the Fund under the ninth review of the program.
IMF asks govt to seek assets’ details from govt officials, employees
The IMF had set several conditions for resuming the bailout, including a market-determined exchange rate for the local currency and an easing of fuel subsidies. The central bank recently removed a cap on exchange rates and the government raised fuel prices by 16pc.
Meanwhile, the rupee lost 0.93% in the interbank market on Thursday, closing at a new historic low of Rs271.36 against the dollar, according to the SBP. The open market offered the dollar at Rs275.50 compared to Rs275 a day before.
USD to PKR: Pakistani rupee slides to all-time low against US dollar in interbank
Currency experts said that despite a free-floating exchange rate, the situation was still uncertain and exporters and others were reluctant to sell their dollars in the market.
