Oct 13, 2022
Pakistan’s Forex Reserves Drop to Lowest in Three Years
(Bloomberg) -- Pakistan’s foreign exchange reserves dropped to the lowest level in three years as assistance from multilateral lenders and friendly countries is yet to flow.
The stockpile fell by $303 million to $7.59 billion, according to central bank data. The reading is the lowest since July 2019 and covers less than six weeks of imports.
“This decrease was entirely attributed to external debt repayments, which included repayment of a commercial loan and interest payment on Eurobonds,” said the central bank in statement.
The South Asian nation sought a bailout to avert a default and rebuild reserves but even before the money trickled in, it was hit by devastating floods that submerged nearly a third of the country, exacerbating the already weak finances. Foreign reserves have dwindled to multi-year lows across Asia after a surging dollar spurred asset revaluations.
Pakistan secured a $1.1 billion loan from the International Monetary Fund late August, while funds from the World Bank and Asian Development Bank are still awaited. Nearly $5 billion worth of investment commitments from Arab countries will also materialize mostly next year.
Authorities, meanwhile, have imposed curbs and are deferring import payments to protect the declining reserves that are hurting economic activity.
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