ISLAMABAD [Pakistan]: Amid a severe economic crisis, the foreign exchange reserves held by the State Bank of Pakistan (SBP) dropped to a mere USD 4.5 billion, leaving the country with an import cover of less than one month.
After repaying loans totalling $1.2 billion to banks in the United Arab Emirates, Pakistan has experienced a financial downturn. Sources indicate that the nation’s import cover is less than a month as they work to address the economic crisis and reduce imports brought about by a lack of dollars.
According to sources, a breakup indicates that Pakistan returned USD 600 million to Emirates Bank while repaying USD 420 million to Dubai Islamic Bank.
The coalition government is reportedly attempting to secure 1.5 billion US dollars in foreign funding at the International Conference on Climate Resilient Pakistan.
Pakistan Prime Minister Shehbaz Sharif is scheduled to travel to Geneva on Sunday. As per his schedule, he will lead a high-level delegation comprising federal ministers and SAPMs to Switzerland, where he will co-host the conference and United Nations Secretary-General Antonio Guterres on January 9.
The conference seeks to help the Pakistani people and government rebuild and recover more efficiently from the recent severe floods.
Minister for Planning and Development Ahsan Iqbal stated, “our friendly nations are anticipating the donor’s gathering to be able to offer assistance [and give out loans].
At the end of the week on December 30, 2022, the foreign exchange reserves held by the central bank decreased by USD 245 million to the lowest since April 2014, reaching the amount of USD 5.57 billion. This was a decline from the prior week’s figure of USD 5.821 billion.
The total foreign reserves held by commercial banks is USD 11.42 billion, with USD 5.84 billion of that amount being held by commercial banks.
The NSC recently approved a plan of action comprising import restrictions and hindering illicit currency transfers and hawala transactions to fortify the economy.
Because of the crisis, Pakistan will replay approximately USD 8.3 billion through external debt servicing over the current fiscal year’s next three months (Jan-March).
The government has been attempting to get the ninth review of the IMF approved in order to secure a USD 1.7 billion bailout package, but there has yet to be significant progress in recent days.
Furthermore, PM Shehbaz stated, “IMF delegation will visit Pakistan in 2-3 days in order to finalize the ninth review of the economy to unstick a direly needed bailout tranche of USD 1.1 billion.
PM Shehbaz also held a discussion session with IMF Managing Director Kristalina Georgieva, in which he highlighted the wish of Pakistan to complete the IMF bailout programme.
The Premier of Pakistan also urged the IMF Managing director to soften the terms of the deal because the masses cannot be burdened anymore. “We have slapped taxes on the rich segments of society.”