The State Bank of Pakistan’s (SBP) foreign exchange reserves have recovered after falling for three weeks in a row and losing a total of $1,685 million during that time, according to a statement from the central bank.
SBP has $3,192.9 million in foreign exchange reserves as of February 10, an increase of $276 million from the previous week. The trend of decreasing reserves has ended thanks to this increase, which represents a gain of nearly 9%.
Even with the increase, however, there is still just enough money to pay for imports for one month. The total liquid foreign reserves of the nation now number $8,702.2 million, or $5,509.3 million more than SBP, thanks to the net foreign exchange reserves held by commercial banks.
Due to a balance-of-payments crisis, political unrest, and deteriorating security, Pakistan’s economy is in serious trouble. Until it receives a vital loan tranche from the International Monetary Fund (IMF), which could open up new financial sources for the nation, the government has barred all imports save from the necessities of food and medicine.
Because of the high increase in inflation, the sharp decrease in the value of the rupee, and the difficulty the nation is having paying for imports, its industry has suffered greatly. Since January, Pakistan has stopped providing letters of credit, with the exception of those for necessary items like food and medicine, which has caused a backlog of imports of raw materials that the nation can no longer pay.
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According to Geo, the devaluation of the rupee and the gridlock have caused a sharp fall in building projects and manufacturing, including steel and textiles.
Although the cash infusion from the IMF won’t be enough to save Pakistan on its own, the government is hoping that it would restore confidence and open the door for additional loans from friendly nations like Saudi Arabia, China, and the UAE.
