ISLAMABAD: According to the State Bank of Pakistan’s data, the liquid foreign reserves with the state bank have gone up to $3.814 for the week ending on February 24th. This is a $556 million dollar increase in the reserves level since the previous week.
The increase in the FX reserves was seen on the back of $700 million dollars that Pakistan obtained from the Chinese development bank. The total reserves of the country also saw a subsequent increase.
Pakistan’s total reserves now stand at $9.267 billion, out of which $5.453.8 belongs to the Banks. It is also important to note that the reserves with the banks have gone down by $14.2 billion dollars over the course of the last two months.
Even though Pakistan’s reserves have gone up, the country closes in on debt repayments. According to the IMF, Pakistan is falling short of $7 billion in terms of external financing for the current fiscal year.
Even with an expected rollover of around $4 billion, Pakistan will have to pay back $2.9 billion within the next three months. As of now, majority of financing commitments that Pakistan has received, are contingent upon the 9th review of the IMF. Whereas the debt obligations for the current fiscal year stand at $7.2 billion.
It is also important to note that even at the $3.8 billion mark, Pakistan’s import cover is less than 1 month. Even lesser now that the exchange rate has dropped by 7%. As per the IMF and experts, Pakistan needs at least $11 billion in the next 4 months of the fiscal year. The Finance Minister is confident that Pakistan will not default on its debt obligations, however inflation outlook does not look promising for the next calendar year.
