Islamabad, 20 July, 2023 (GNP): The State Bank of Pakistan (SBP) has announced a significant surge in its foreign exchange reserves, which increased by $4.2 billion to $8.7bn during the week ending July 14, as reported in an official statement by the central bank.
The reserves have almost doubled within a week. This remarkable growth in reserves is attributed to key inflows from various sources. Pakistan received $2 billion from Saudi Arabia, $1.2 billion from the International Monetary Fund (IMF) under a $3 billion standby arrangement, and an additional $1 billion from the United Arab Emirates, the SBP statement said.
Furthermore, this excludes the rollover of a $600 million loan from China announced by Prime Minister Shehbaz Sharif, which is expected to further bolster the SBP’s reserves.
Also Read: Pakistan receives $1bn from UAE, bolstering foreign exchange reserves
This resurgence in forex reserves comes as a welcome development after a challenging period for Pakistan’s economy. The SBP’s reserves had experienced a decline, starting from $17.6 billion on January 7, 2022, to $5.6 billion on December 30 of the same year.
The downward trend persisted into the new year, with reserves reaching their lowest level of $2.92 billion on February 3. The last time reserves fell below this level was nine years ago in February 2014 when they were recorded at $2.84 billion.
The approval of a new short-term bailout package by the IMF, amounting to $3 billion, earlier this month played a crucial role in improving the economic outlook for Pakistan. This paved the way for additional inflows from other sources, contributing to the current positive trajectory in the country’s foreign exchange reserves.
