During the week ending December 1, 2023, the State Bank of Pakistan (SBP) witnessed a decline of $237 million in its foreign exchange reserves, bringing the total to $7,020.2 million. This reduction is attributed to debt repayments.  

As of the same date, the country’s overall liquid foreign reserves amounted to $12.1 billion. Commercial banks held net foreign reserves totaling $5.08 billion. 

Notably, the central bank’s reserves received a boost in July of the current year when Pakistan secured the initial tranche of approximately $1.2 billion from the International Monetary Fund (IMF).  

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This was part of a newly approved $3 billion stand-by arrangement (SBA). Additionally, inflows were received from Saudi Arabia and the UAE. 

Despite these positive developments, the SBP’s reserves have been under pressure due to ongoing debt repayments, increased import payments following eased restrictions, and a lack of new inflows. 

In a significant development, the IMF announced last month that a staff-level agreement (SLA) had been reached between its team and Pakistani authorities regarding the first review of the SBA.  

However, the approval of the IMF Executive Board is required for this agreement to take effect. 

Upon approval, approximately $700 million (SDR 528 million) will become available, bringing the total disbursements under the programme to almost $1.9 billion. 

Addressing the media after the SLA with the IMF, Caretaker Finance Minister Dr Shamshad Akhtar expressed confidence that external financing would not be a concern.  

The government anticipates inflows in December 2023, which are expected to contribute to an increase in foreign exchange reserves.