Forex Reserves of Pakistan Rise by $700m

(Karachi: By Muhammad Tashfin) Finance Minister Ishaq Dar announced on Friday that the State Bank of Pakistan (SBP) has received $700 million from the China Development Bank (CDB), providing a much-needed boost to the forex reserves of Pakistan as the economy continues to deteriorate.

According to Finance Minister Dar, a loan from China Development Bank will help forex reserves of Pakistan.

The statement was made on Twitter by the finance minister. “AlhamdoLilah! The State Bank of Pakistan received $700 million from the China Development Bank today “.

Dar had previously stated that the loan would “bolster” Pakistan’s foreign exchange reserves in a tweet.
For the first time in nine years, the country’s foreign exchange reserves fell below $3 billion earlier this month, lowering import capacity to slightly more than two weeks.

As the government seeks to revive the International Monetary Fund (IMF) programme, Pakistan has sought to secure assurances from Saudi Arabia and China for more loans.

Devastating floods last year and repeated bouts of political turmoil have left the country struggling to pay for basic goods and at serious risk of joining the list of defaulters.

It desperately needs the IMF to release an overdue tranche of $1.1 billion from an existing bailout programme. The country’s finance secretary has said he hopes talks with the Fund can be wrapped up this week.

But with its debt-to-GDP ratio already in the 70% danger zone and between 40% and 50% of the government revenues earmarked for interest payments alone this year, it will soon need more.

The country is now expecting that its friends would come to its aid, as it has worked hard to persuade the IMF.

Islamabad has agreed to adopt the Memorandum of Economic and Financial Policy (MEFP), which includes IMF policy recommendations.

According to sources, the staff-level agreement between the fund and the government is likely next week.