Forex reserves fall by $74 million
The total liquid foreign reserves held by the country stood at $17.005 billion.
KARACHI (Dunya News) - The total liquid foreign reserves held by the country stood at $17.005 billion after registering a decline of $74 million.
Reserves held by the State Bank of Pakistan (SBP) soared to $10.369 million after witnessing an increase of $19 million, whereas reserves of other banks dropped by $94 million to $6.636 billion.
Pakistan is on the verge of a balance-of-payments crisis, which threatens the stability of its currency and its ability to repay debts or pay for imports. Its budget deficit has grown steadily over the past five years, from four per cent to 10pc of GDP.
Imports have skyrocketed, mainly due to rising oil prices. Between July 2017 and March, about 70pc of the country’s import bill was for energy, machinery and metals, according to a State Bank of Pakistan report. Meanwhile, exports - mainly textiles - have increased only slightly.
As a result, the foreign currency reserves have declined to about $10.3 billion, according to recent figures given by the caretaker government.
This covers less than two months of imports, analysts say. Meanwhile the rupee has been devalued four times since December, fuelling inflation.
On Tuesday, finance minister-in-waiting Asad Umar announced that the decision on a possible IMF loan would be taken by "the end of September".
"There is a general perception that we have picked up very expensive loans from the Chinese. I personally don t think so," he told reporters in Islamabad.
"They are like most commercial loans," he said, denouncing the "lack of transparency" by the previous government on the subject.
With inputs from AFP and Reuters
