The State Bank of Pakistan’s (SBP) foreign exchange reserves continued to plummet, falling by $584 million as of December 16 to total $6.1 billion.
This is the lowest level of reserves since April 2014, according to SBP.
Over the past year, SBP’s reserves have dropped by $11.6 billion. A month’s worth of imports can hardly be covered by the central bank’s reserves, which were $17.7 billion in December 2021 and are now $6.1 billion.
Currently, $5.9 billion of Pakistan’s $12 billion in liquid foreign reserves are held by commercial banks as net foreign reserves.
The reserves were badly reduced as a result of the lack of external aid, the IMF program’s revival being delayed, a worsening trade imbalance, and mounting foreign loan obligations.
The ninth review discussions have reportedly been postponed due to objections from the Fund regarding a significant budget imbalance.
The government is urged by the IMF to stabilize the economy, but it doesn’t appear inclined to increase taxes in order to boost revenue. It should be noted that Pakistan has borrowed about $5.115 Billion during PDM Government tenure.
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