SBP reserves tumble by $119m to $4.19b due to external debt repayments

| Total liquid foreign reserves held by country stand at $9.73 billion

ISLAMABAD-Pakistan’s foreign exchange reserves have further declined by $119 million to $4.19 billion in the last week mainly due to the debt repayment and lesser borrowing available amid suspension of the International Monetary Fund (IMF)’s programme.
“During the week ended on 19-May-2023, SBP reserves decreased by $119 million to $4,193.0 million due to external debt repayments,” the State Bank of Pakistan (SBP) said in its brief statement. It added that total liquid foreign reserves held by the country stood at $9.731 billion as the reserves held by the SBP are $4.19 billion and net foreign reserves held by commercial banks are $5.53 billion.
The reserves are tumbling mainly due to repayment against previous loans. The government would have to repay over three billion dollars by the end of next month (June). On the other hand, the foreign inflows have almost dried amid suspension of the International Monetary Fund (IMF)’s programme. The international financial institutions are not releasing funds for Pakistan in the absence of the IMF programme. Pakistan and IMF have yet to reach a staff lev¬el agreement as both sides are continuously negotiating since January 31 this year. The government had met all prior actions of the IMF. The government has taken all tough decisions including increasing power and gas prices massively and impos¬ing new taxation measures worth Rs170 billion. Pakistan had accepted two more conditions. The government, on the IMF demand, has imposed a surcharge of up to Rs3.23 per unit on electricity consumers across the country from July 1.
The government has received foreign borrowing worth only $8.12 billion from the international lenders in 10 months (July-April) of the current fiscal year 2022-23, which is only 35.6 percent of the annual projected borrowing. The government has budgeted foreign assistance of $22.817 billion for the current fiscal year. The breakup of the $8.12 billion loan showed that Pakistan has taken $900 million from foreign commercial banks and $1.166 billion from the International Monetary Fund (IMF) during July-April of 2022-23. The government has also received $677.24 million under the head of the “Naya Pakistan Certificate”, $4.135 billion from the multilaterals and $1.243 million from bilateral sources during July-April 2022-23.
According to the data of the ministry of Economic Affairs, the Asian Development Bank (ADB) has released $1.975 billion to Pakistan during the period under review compared to the budgeted $3.202 billion for the entire fiscal year. The ADB disbursed $35.20 million in April 2023. China disbursed $127.89 million during the first ten months of the current fiscal year including $72.96 million in April against the budgeted $49.02 million for the entire fiscal year. Saudi Arabia disbursed $982.28 million against the budgeted $800 million under the head of the oil facility during the first 10 months. The USA disbursed $27.71 million during the period under review against the budgeted $32.49 million for the current fiscal year. Korea disbursed $21.31 million and France $32 million during the first 10 months of the current fiscal year. The IDA $1.173 billion against the budgeted $1.4 billion during the first 10 months including $70.47 million in April, IBRD $151.64 million against the budgeted $1.246 billion and Islamic Development Bank disbursed $16.81 million against the budgeted $3.38 million for the current financial year. The IsDB (Short-term) disbursed $161 million in the current fiscal year. The AIIB disbursed $550.27 million in current fiscal year so far, while ECO (Trade Bank) disbursed $54.12 million.

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