Pakistan foreign currency reserves deplete after stalemate over IMF package
Dec 24, 2021
Islamabad [Pakistan], December 24 : Pakistan's foreign currency reserves are depleting after the persistent stalemate over the renewal of the IMF package.
Pakistan's total foreign exchange reserves stood at USD 25.027 billion; the foreign reserves held by the SBP stood at over USD 18 billion and commercial banks USD 6.45 billion, reported Geo News.
Meanwhile, during the week ending on December 10, the foreign exchange reserves decreased by USD 90 million to USD 18.56 billion.
Out of the USD 802.3 million in foreign loans raised in November 2021, Islamabad received USD 663.2 million from international commercial banks, reported Geo News.
Sources site Islamabad's inability to accomplish the 6th review under the USD 6 billion IMF package as the reason for reliance on easy dollar inflows.
The publication quoted top official sources as saying, "It was Islamabad's inability to accomplish the 6th review under USD 6 billion Extended Fund Facility (EEF) of the IMF which continued the country's strong reliance on cheap dollar inflows through commercial banks."
Despite making plans to raise USD 1 billion through the launch of the Sukuk Bond, the government could not move ahead in the wake of witnessing a low appetite of the international market, the publication reported.
It was then decided that the bond would be launched in the second half (Jan-June) period of the current fiscal year, reported Geo News.
Data analysis shows government forced to opt for short-term commercial loans to meet its annual budgetary targets on external inflows.
Pakistan continues to rely significantly on international commercial banks to produce dollar inflows, The News reported Friday.
Against the total budgetary estimates of USD 14.008 billion for the whole fiscal year 2021-22, Islamabad has so far generated USD 4.699 billion during the first five months of the current fiscal year.
An analysis of official data showed that the government was forced to go for short-term commercial borrowing to bridge the gap and to meet its budgetary targets on external inflows on an annual basis, reported Geo News.
