ISLAMABAD: Pakistan's foreign exchange reserves held by the central bank fell to an alarmingly low level of $2.9 billion on Thursday, official data confirmed, as Pakistan negotiates with the International Monetary Fund (IMF) to revive a $7 billion loan program.
Pakistan is locked in negotiations with the international money lender in hopes of securing critical external financing to shore up its foreign reserves. If the IMF agrees to revive the loan tranche for Pakistan, it could unlock funds from other platforms that are waiting for the global money lender's green signal.
The South Asian country's critically low forex reserves have caused its currency to plummet to an all-time low against the US dollar. In addition, Pakistan has imposed restrictions on imports to prevent dollar outflows, leading to commercial banks refusing to open letters of credit (LC) for importers.
In a statement, the State Bank of Pakistan (SBP) said the country's total liquid reserves stood at $ 8.5 billion.
"During the week ended on 03-Feb-2023, SBP’s reserves decreased by US$ 170 million to US$ 2,916.7 million due to external debt repayments," it added.
Meanwhile, Pakistan's rupee continued to appreciate for a second consecutive day against the U.S. dollar. According to the central bank's data, the rupee appreciated by Rs2.82 or 1.04% against the dollar.
Pakistani financial analysts told Arab News on Wednesday the rupee, which appreciated by Rs2.96 a day earlier, had strengthened because of the expectations of a "positive" outcome between the government and the IMF.
