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The foreign exchange reserves held by the State Bank of Pakistan (SBP) hit a nine-year low of $3.678 billion during the week ending on Jan. 20, as the country continues to suffer a massive shortage of dollars to fund its imports.
According to data issued on Thursday, the central bank said its forex holdings had decreased by $923 million during the period under consideration due to external debt repayments. Overall, the total reserves—including those held by commercial banks—now stand at $9.5 billion, as banks’ holdings also fell by $68 million to $5.8 billion in the week ending Jan. 20.
The reserves currently held by the SBP are barely sufficient to even cover three weeks of imports. Last week, SBP Governor Jameed Ahmad claimed that the government expects inflows from “next week” to bolster reserves, but these have yet to materialize. He had also voiced optimism about reviving the stalled International Monetary Fund bailout.
On Thursday, the government ended an unofficial market cap on interbank trade of the rupee, triggering a depreciation of nearly 10 percent in a single-day. The move had been seen as key to the IMF’s demands, a perception supported by the global lender announcing it would send a team to Pakistan next week to continue discussions on the pending ninth review.
Market observers have said reviving the IMF is especially essential, as even “friendly” nations have refused to release funds pledged to Pakistan unless the global lender is onboard.