Pakistan's forex reserves continue to decline

• Foreign exchange reserves drop to $15.2 billion as of June 3.
• Net forex reserves held by commercial banks stand at $5.9 billion.
• SBP says its reserves dropped due to external debt repayment.

KARACHI: Pakistan's foreign exchange reserves continued the downtrend as the total amount held by the country dropped to $15.2 billion, the latest data from the State Bank of Pakistan (SBP) showed Thursday.

The total liquid foreign reserves held by the country stood at $15,176.5 million as of June 3, after the reserves declined by $594.9 million or 3.77%, compared to $15,771.4 million reserves on May 27, the data revealed.

Breakup of the reserves:

• Foreign reserves held by SBP: $9,226.2 million
• Net foreign reserves held by commercial banks: $5,950.3 million
• Total liquid foreign reserves: $15,176.5 million

Citing the reason for the decline, the central bank said its reserves fell by $497 million due to external debt repayment.

Finance Minister Miftah Ismail, in a press conference earlier today where he launched the Economic Survey 2021-22, said that Pakistan would get be getting loans from Chinese banks by next Tuesday.

"I assure you that by Tuesday next week, the issue of foreign exchange reserves will be resolved as the expected $2.4 billion will be transferred from China. Our forex reserves will reach $12 billion,” the finance minister said.

Apart from the Chinese banks, Pakistan is also trying to reach a staff-level agreement with the International Monetary Fund (IMF) and the government is hopeful of striking a deal this month.

The restoration of Pakistan's delayed IMF programme rests on the government's capacity to make fiscal adjustments of about 2.5% of the gross domestic product (GDP), or Rs2,000 billion, by increasing revenues and reducing expenditures in the upcoming budget 2022-23.