The State Bank of Pakistan’s (SBP) foreign exchange holdings climbed by $280 million as of March 17, reaching $4.6 billion.
The central bank-held reserves have increased for six weeks in a row, but the aggregate balance remains dangerously low at just about a month’s worth of import coverage.
The nation’s total liquid foreign reserves were $10.14 billion. The total amount of net foreign reserves held by commercial banks was $5.54 billion.
“SBP got $500 million as a commercial loan payment from the Government of Pakistan for the week ending March 17, 2023.” The SBP said that after accounting for repayments of external loans, its reserves rose by $280 million to $4,598.7 million.
The SBP’s foreign exchange holdings grew by $18 million last week.
Pakistan got the second $500 million transfer from the Industrial and Commercial Bank of China (ICBC) earlier in the month. Pakistan has received $1.7 billion from Chinese institutions overall, with an additional $300 million anticipated.
Despite ongoing negotiations, the crucial International Monetary Fund (IMF) program is still in limbo after Pakistan proposed a new gasoline subsidy. The economy, especially the rupee, is suffering as a result of the delay in reaching a deal with the IMF.
The economy, which is largely dependent on imports to power its engines, is under additional stress as a result of a lack of foreign currency reserves. While certain restrictions on inbound shipments have been implemented by the SBP, which has helped to reduce the current account deficit, many enterprises have been forced to close or scale back operations as officials work to secure dollar inflow.
