The State Bank of Pakistan’s (SBP) foreign exchange reserves decreased to $3.678 billion, a record nine-year low, during the week ended January 20.
The SBP reported on Thursday that due to the repayment of external debt, its foreign exchange reserves fell by $923 million during the week.
As the SBP reserves are quickly running out and even do not cover imports for three weeks, the government has all but given in to IMF demands for the renewal of the loan program.
At the ports, almost 9,000 containers are awaiting payment for clearance. Additionally, ships bringing important goods like gasoline, LNG, and soybean are waiting for payment, but the government is still in need of inflows.
The government has complied with the fund’s primary requirements, such as a market-based dollar-rupee exchange rate and a high-interest rate, and it is set to levy a 17 percent general sales tax on fuel and gasoline within the next week.
Although the economy is in poor health, the worst scenario is on the foreign front.
The country’s total reserves were $9.5 billion, down $990 million, and the holdings of commercial banks decreased by $68 million to $5.8 billion during the week.
