Forex SBP Reserves Fall by $115mn Below $7.4 Billion.
In a recent update, the State Bank of Pakistan (SBP) reported a notable weekly decline of $115 million in forex reserves, marking a total of $7.4 billion as of November 10.
The primary factor attributed to this dip is the ongoing debt repayments, reflecting a broader trend of economic challenges.
This dip, however, stands in contrast to the overall picture of the country’s liquid reserves, which include net reserves held by commercial banks. The total liquid foreign reserves for Pakistan, despite the weekly decline, remain significant at $12.5 billion.
Commercial banks’ net foreign reserves also saw a slight increase, reaching $5.1 billion, showcasing resilience in the face of economic dynamics.
This dip in State Bank of Pakistan (SBP) reserves is part of a broader narrative that includes heightened debt repayments, increased import payments following the easing of restrictions, and a temporary lack of fresh inflows. However, a potential remedy is on the horizon.
In July, Pakistan experienced a boost in its forex reserves, triggered by the first tranche of approximately $1.2 billion from the International Monetary Fund (IMF) under the approved $3 billion Stand-By Arrangement (SBA).
Additional contributions from Saudi Arabia and the UAE contributed to this positive momentum.
The recent announcement of a staff-level agreement with the IMF for the first review of the SBA introduces a potential solution.
If approved by the IMF Executive Board, around $700 million could be disbursed, bringing total program disbursements to nearly $1.9 billion.
This development is crucial for Pakistan’s economic stability, with the decision awaiting approval from the IMF Executive Board.
The staff-level agreement is subject to approval by the IMF Executive Board.
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“The IMF team has reached a staff-level agreement (SLA) with the Pakistani authorities on the first review of their stabilization program supported by the IMF’s US$3 billion (SDR2,250 million) SBA,” the financial agency said in its press release.
“The agreement is subject to the approval of the IMF’s Executive Board. Upon approval around US$700 million (SDR 528 million) will become available bringing total disbursements under the program to almost US$1.9 billion,” it added.
Stay informed about the evolving economic landscape as decisions from the IMF unfold, shaping the trajectory of Pakistan’s foreign exchange reserves and financial outlook in the coming weeks.
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