Business Desk
ISLAMABAD: As the opposition hypes fear of default, the foreign exchange reserves of Pakistan fell to its lowest level of three years owing to heavy sukuk payments and meager inflows.
Talks of partial repayment of debts from incoming loans were also confirmed.
According to data released by the State Bank of Pakistan (SBP) on Thursday evening, the payment of $1 billion against maturing Sukuk and some other external debt repayments saw outflows grow to $1 billion.
As a result, the reserves held with the SBP fell by $783.8 million from $7.5 billion for the week ending on November 25, 2022, to $6.7 billion for the week ending December 2, 2022.
Funds held with commercial banks fell by a meager $12.7 million as it saw the reserves contract from $5.88 billion to $5.87 billion during the reporting week.
This meant that the total reserves of the country fell from $13.38 billion to $12.58 billion, a cumulative drop of $796.5 million.
The central bank, in a communique, said that some of the debt repayments were offset by US dollar inflows.
The inflows mainly consisted of the $500 million received from the Asian Infrastructure Investment Bank (AIIB) which was part of the Asian Development Bank’s (ADB) $1.5 billion Building Resilience Under Active Countercyclical Expenditures (BRACE) program to help Pakistan deal with the impact of floods and deal with poverty.
The BRACE Program will expand the number of families receiving cash transfers through Benazir Income Support Program from 7.9 million families to 9 million families.
Dire straits
Pakistan has not been this hard pressed for cash in a while. The last time its forex reserves were this low was in November 2021. Back then, the country had a total of just $11.952 billion in foreign currency. Of this, the central bank held some $9.112 billion while commercial banks held another $2.84 billion.
