By Staff Reporter
KARACHI: State Bank of Pakistan’s (SBP) dollar stockpile hit a 32-month low of $8.2 billion from $8.99 billion last week, latest numbers revealed on Thursday, which leaves the country with an import cover for just 1.21 months, but a top-up of likely $2.3 billion from Chinese banks could lift them to a less critical level.
The central bank said the foreign exchange reserves fell $748 million or 8.3 percent week-on-week owing to external debt payments.
Country’s total liquid dollar reserves were at $14.21 billion as of Jun 17, 2022 with net foreign reserves held by commercial banks standing at $5.97 billion. It is the lowest level since January 2019.
The reserves are bleeding at an alarming rate and the new economic team is unable to find a way to stem it other than getting a stalled IMF loan programme going.
The depletion started after the suspension of a $6 billion International Monetary Fund programme, because the last government in contravention to its agreement with the Fund decided to dole out subsidies on power and petroleum products to prop up its eroding popularity and calm down the inflation-battered consumers.
The new government is moving heaven and earth to narrow its widening current account deficit being fed by surging imports and runaway inflation.
The SBP in a bid to cut down the general jitters expressed hope that potential Chinese inflows would bolster the reserves in the near future.
“SBP reserves are expected to increase in the coming days on realisation of proceeds of CDB [China Development Bank] loan,” it said in a statement.
Rupee recovered 4.70/dollar on Thursday in its biggest ever single-day clawback drawing strength from reports of approval of a $2.3 billion loan by China amid strong hopes of resumption of the IMF bailout after the government and the Fund struck consensus over the budgetary measures for the next fiscal.
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