Economy

Pakistan's forex reserves fall to near four-year low

Published: 06:32, 10 December 2022

Pakistan's says its foreign exchange reserves have fallen to 6.7 billion US dollar, its lowest level in nearly four years as the country battles an economic crisis.

Thursday's announcement by the State Bank of Pakistan (SBP) came as the country is in dire need of foreign aid to reduce its present account deficit as well as ensure enough reserves to pay its debt obligations for the next fiscal year.
The SBP's data show forex reserves have declined by 784m US dollar since late November, with the commercial banks holding another 5.8 billion dollar.
The last time forex reserves fell below 7 billion dollar was in January 2019 when they stood at $6.6 billion.
In an interview on Thursday, State Bank of Pakistan governor Jameel Ahmad said Pakistan's economic crisis was mainly caused by this year's catastrophic floods, the continuing Ukraine war and a rise in food prices globally.
Governor Ahmad said Pakistan previous week made a 1bn dollar payment against its maturing bonds and other external debt repayments, which resulted in the depletion of foreign reserves.
Pakistan has to pay nearly 33 billion dollar to its foreign lenders in the coming financial year.
The Pakistan central bank chief said the country received 500m dollar from the Asian Infrastructure Investment Bank to offset its payment previous week. He added that the government is negotiating to seek 3b dollar from a 'friendly country', without giving further details.
In a related development, Saudi Arabia's finance minister Mohammed al-Jadaan on Thursday said his country 'will continue to support Pakistan as much as we can'. Local media reports said Pakistan is likely to receive a 4.2 billion dollar package from Riyadh.
Meanwhile, an International Monetary Fund (IMF) review for the release of 7b dollar in a bailout package for Pakistan has been pending since September. A $6bn bailout was agreed on with the global financial body in 2019, with an additional 1b US dollar promised earlier this year.