Foreign exchange reserves held by the State Bank of Pakistan (SBP) rose for the sixth consecutive week on Friday, climbing by $280 million to $4.6 billion.
According to data issued by the central bank for the week ending March 17, the $280 million increase is linked to the disbursement of a loan from China. During the week ended on [March 17], SBP received $500 million as commercial loan disbursement,” it said, adding that the current standing of reserves had factored in external debt repayments.
On March 17, Pakistan received $500 million from the Industrial and Commercial Bank of China (ICBC), the second disbursement of a $1.3 billion facility, helping restore stability to the foreign exchange reserves held by the central bank. According to the SBP’s bulletin, net foreign exchange reserves held by commercial banks currently stood at $5,540.5 million, $941.8 million more than the SBP, bringing the total liquid foreign exchange reserves of the country to $10.14 billion.
Pakistan is currently striving to revive a stalled International Monetary Fund (IMF) program to secure the release of a $1.1 billion tranche from a $6.5 billion Extended Fund Facility, but has hit an impasse over the lender’s demands for Islamabad to get confirmation from ‘friendly’ countries of roughly $6 billion in fiscal support. Economic experts have warned that the months-long negotiations have proven disastrous for the economy, bringing the country closer to default. However, the government maintains that there is no risk of default and has repeatedly claimed that once the IMF deal has been revived, it would unlock additional inflows from other states, easing the country’s financial crunch.