KARACHI: Since the IMF’s $1.1 billion arrival in April, the State Bank of Pakistan’s (SBP) foreign exchange reserves have stayed at approximately $9 billion, indicating no additional inflows.
The central bank said on Thursday that, in the week ending May 31, its reserves rose by a pitiful $16 million to $9.109 billion. The source of this inflow was not disclosed.
But throughout the week, the commercial banks’ reserves dropped by $116 million to $5.1 billion, bringing the nation’s total down by $100 million to $14.2 billion.
Unsettlingly, financial industry insiders disclosed that Pakistan is up against a formidable obstacle. Up to $10 billion in debt servicing is anticipated from the nation until July 31; this amount exceeds the SBP’s total foreign exchange holdings.
The severe circumstances highlight the nation’s pressing requirement for prompt help to strengthen its reserves.
Prior to this, there were a lot of media reports regarding a possible IMF loan package in July. It’s crucial to remember that the required quantity is far greater than the current reserves, which could provide a problem for the nation even though sources have suggested that it is possible.
It was also noted, though, that the financial gurus appeared to be looking forward to another rollover of Chinese loans. Pakistan owes China almost $26 billion. Just prior to the budget, the foreign, finance, and prime ministers are in China. The visit increased the rumors around the debt rollover.
