The State Bank of Pakistan (SBP) announced on Thursday that the central bank’s foreign exchange reserves have decreased by $170 million, remaining at $4 billion. According to the SBP, the reserves decreased due to debt payments, which pose a significant obstacle to the country’s external front. Despite the current account deficit plunging, the government is unable to overcome the challenge. The current account deficit for the first eight months of the current financial year has decreased to just $3.86 billion, as opposed to $12 billion in the previous year. However, the depleted foreign exchange reserves are insufficient to meet the country’s requirements.
Pakistan has been requesting the International Monetary Fund (IMF) to release a $1.1 billion tranche associated with the ninth review, but the Fund has requested the country to arrange the $6 billion required to meet repayments by the end of June 2023. Pakistan has held numerous meetings with the IMF, but a staff-level agreement is still pending.
On Thursday, Topline Securities issued a report on international bond payments, stating that Pakistan has made coupon payments on various global bonds. $125 million has already been paid, while another $167 million is due on April 15 and will be paid on time, the report stated. Another significant payment of $167 million is due in October 2023, followed by a $1 billion maturity in April 2024, according to the report.
These are international bond payments, and the country requires around $6 billion to service bilateral and multilateral loans, including donor agencies.
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The SBP reported that the total foreign exchange reserves for the week ending April 7 were $9.564 billion, with commercial banks holding $5.526 billion.
Meanwhile, the Pakistani rupee appreciated by Rs1.71 against the US dollar on Thursday in the interbank market. Within two sessions, the PKR recovered by Rs3.52 against the US dollar. The previous day, the local currency gained Rs1.81 after reaching a record high of over Rs288. The open market reported the dollar price at Rs292, down from Rs294 the previous day.