Foreign exchange reserves with State Bank of Pakistan increased by $10.7 million to $4 billion during week ending June 9, 2023.
However, English daily Dawn has claimed that Pakistan allegedly paid one billion dollars to China on Monday, which has reduced the State Bank’s reserves to $3 billion, but the Ministry of Finance has not confirmed or denied this media report. Who is
Finance Minister Ishaq Dar has expressed disappointment over the behavior of Pakistan regarding the bailout package and said that the IMF is wasting its time.
The time to complete the $6.7 billion loan program will end on June 30, while the country was supposed to receive two installments of about $2.2 billion before that date. The IMF has raised questions about the fiscal year 2023-24 budget measures while rating agencies have warned that time is running out to convince the IMF for a much-needed bailout package for Pakistan.
Analysts said that throughout FY23, the country had to face the dire problem of low foreign exchange reserves and the same could happen in FY24 with or without IMF support.
The State Bank reported the country’s total foreign exchange reserves at $9.378 billion, including $5.359 billion held by commercial banks.
Foreign exchange reserves have a negative impact on the exchange rate. The country has reserves available for barely two weeks of imports. Strict import controls cost the economy heavily.
The State Bank has allowed importers to arrange the dollar on their own, which has led to an increase in its rates in the open and gray markets.
In the open market, currency dealers on Thursday pegged the dollar at Rs 295 against Rs 294 a day earlier. The State Bank said the dollar closed at Rs 287.37 in the interbank market, which was 19 paise higher than a day earlier.