Pakistan’s forex reserves set to witness record rise

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SBP keeps policy rate unchanged at 7% for next two months
Observer Report
Islamabad

Pakistan’s foreign exchange reserves set to hit high-est once the State Bank of Pakistan (SBP) receives $2.77 billion today (Monday) from International Monetary Fund’s (IMF) general allocations of $ 650 billion that had been approved to boost global li-quidity amid the coronavirus pandemic

The board of governors of the International Mone-tary Fund (IMF) had greenlit increasing the institu-tion s lending capacity by $650 billion, the last step in approving an initiative to boost aid to the most vulnerable countries.

The IMF Executive Board had approved the pro-gram to deal with global coronavirus pandemic.

Pakistan will get $2.77 billion unconditional loan from IMF and the money will be transferred to the central bank’s account.

Sources privy to the Ministry of Finance said that the transfer of money will take Pakistan s foreign exchange reserves to an all-time high.

Earlier last week, SBP Governor Reza Baqir said that the highest reserves of $19.5 billion were re-corded in year 2016.

Appreciating the IMF’s step for providing global liquidity, the SBP Governor said that this was a happy news, which he said would help improve country’s reserves and have very positive impact on various economic indicators.

He said the increase in reserves would help provide coverage to imports into the country, saying that since the country was currently in recovery mode, hence needed more imports.

He said that the inclu-sion of $2.77 billion would also help enhance the net international reserves of the country, which is also positive sign for the country’s economy.

It is pertinent to mention here that the Board of Governors of the IMF had approved a general allo-cation of Special Drawing Rights (SDRs) equivalent to US$650 billion (about SDR 456 billion) to boost global liquidity.

The allocation would benefit all members, address the long-term global need for reserves, build confi-dence, and foster the resilience and stability of the global economy.

It would particularly help most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.

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