External loan repayments reduced the State Bank of Pakistan’s (SBP) foreign exchange reserves by $72 million to $4.31 billion during the week ended May 12, the central bank stated on Thursday.
While the threat of default haunts the country, decreasing remittances and FDI inflows put the SBP’s reserves in jeopardy.
Former Finance Minister Miftah Ismail stated on Thursday that the government is unaware of the full scope of the economic crisis.
According to economist Ashfaq Hassan Khan, the PDM government prioritises economic development over political rivalry.
The grave situation with the declining foreign exchange reserves could put Pakistan in trouble particularly when the IMF is not ready to extend loans.
Independent economists and analysts predict that the country would require further IMF loans to avoid default in the coming fiscal year. However, it appears that the Fund will not disburse the $2.2 billion due under the previous $7 billion EFF scheme, which is set to expire on June 30.
The country’s total foreign exchange reserves fell back into the single digits, totaling $9.937 billion, including commercial banks’ $5.625 billion holdings.
Meanwhile, in the interbank market, the US dollar rose 22 paise to Rs285.62 against the rupee. The open market was tranquil, with the US dollar remaining fairly unchanged at Rs299.