Foreign currency reserves of the State Bank of Pakistan (SBP) have fallen to the level of just eight weeks of imports, the lowest since April 2014, central bank data showed on Thursday.
In a statement, the central bank said foreign currency reserves held by the State Bank were recorded at $6,116.2 million as of December 16, down $584 million from $6,700 on December 9.
The decline means reserves have fallen further from last week’s barely 1.5 months of import cover, even as it battles with decades of high inflation and the International Monetary Fund (IMF) to secure funds. is fighting
The country’s total liquid foreign exchange reserves – including net reserves held by banks other than the SBP – stood at $12,000.1 million.
Net deposits held by banks were $5,883.9 million. The central bank cited external debt repayments as a major reason behind the decline.
Pakistan has recently been struggling to contain balance of payments pressures due to dwindling foreign exchange reserves and widening current account deficit.
In the presence of high trade deficits, the delay in the recovery of the IMF program and the lack of foreign aid between the increase in foreign debt repayments caused a heavy loss to the reserves.
The Ninth Review negotiations have apparently been delayed due to criticism of the Fund over the widening fiscal deficit.
The government is unwilling to impose more taxes for higher revenues, while the IMF insists that the government should stabilize the economy.
Additionally, Pakistan’s rupee has fallen nearly 26 percent since the start of the year, hitting its weakest level in September, due to dwindling reserves and a high import bill.
