The State Bank of Pakistan’s (SBP) foreign exchange reserves hardly increased as the nation struggles to discover ways to obtain outside financing and stay afloat. The SBP stated in its weekly report that as of April 20, its reserves had increased by $30 million to $4.46 billion, covering imports for less than a month, which has been the situation for some time. The matter relates to Pakistan’s economic stability.
Commercial banks currently have $5.56 billion in net foreign reserves, which is $1.1 billion more than the SBP and brings the total amount of liquid foreign reserves to $10.02 billion. The Industrial and Commercial Bank of China’s loan contributed to a $300 million boost in reserves last week, despite the fact that the central bank did not state the cause of the increase.
Due to financial difficulties and a delay in reaching an agreement with the International Monetary Fund (IMF), which would release much-needed cash essential to averting the possibility of default, the $350 billion economy is in disarray.
The government and the Washington-based lender have been in discussions to restart the $1.1 billion loan tranche that has been suspended since November. This loan tranche is a component of the $6.5 billion Extended Fund Facility (EFF) that was agreed upon in 2019. Pakistan’s foreign exchange reserves can be bolstered through other bilateral and multilateral funding options that a deal with the IMF will open up.
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Pakistan has “fulfilled all the conditions” of the IMF, according to Finance Minister Ishaq Dar, who expressed optimism earlier this week that the Fund would soon sign the staff-level agreement. Speaking to Geo News, Dar claimed that the United Arab Emirates (UAE) and Saudi Arabia had both informed the IMF of their plans to give Pakistan $3 billion.
Dar said that while Abu Dhabi had pledged $1 billion and Riyadh $2 billion to Pakistan, the Washington-based lender had also been notified.
All requirements for the staff-level agreement between Pakistan and the IMF, according to the finance minister, have been met. Ishaq Dar continued, “Pakistan is hoping that IMF will quickly sign the SLA and get it approved by its Executive Board.
