As the country tries to find ways to secure external financing and keep itself afloat, the State Bank of Pakistan (SBP)-held foreign exchange reserves recorded a meagre rise. The SBP, in its weekly bulletin, mentioned its reserves have jumped by $30 million to $4.46 billion as of April 20, which will provide an import cover of less than a month — a position that has been the same for several months now.
The net foreign reserves held by commercial banks stand at $5.56 billion, $1.1 billion more than the SBP, taking the total liquid foreign reserves to $10.02 billion. Although the central bank did not specify the reason behind the increase, there was a $300 million rise in the reserves last week — which was due to the loan provided by the Industrial and Commercial Bank of China.
The $350 billion economy is in turmoil amid financial woes and the delay in an agreement with the International Monetary Fund (IMF) that would release much-needed funding crucial to avoid the risk of default.
The government has been in talks with the Washington-based lender since end-January to resume the $1.1 billion loan tranche that has been on hold since November, part of a $6.5 billion Extended Fund Facility (EFF) agreed upon in 2019. A deal with the IMF will also unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves.
Finance Minister Ishaq Dar said earlier this week that Pakistan has “fulfilled all the conditions” of the IMF and hoped that the Fund would soon sign the staff-level agreement. Speaking to Geo News, Dar said both Saudi Arabia and the United Arab Emirates (UAE) have informed the IMF about their commitments to provide $3 billion to Pakistan.
Riyadh will provide $2 billion while Abu Dhabi has promised $1 billion to Pakistan, Dar said, adding that the Washington-based lender has also been informed in this regard.
The finance minister said all the conditions for the staff-level agreement between Pakistan and IMF have been fulfilled. “Pakistan is hopeful that IMF will soon sign the SLA and get it approved by its Executive Board,” Ishaq Dar added.
