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SBP-held foreign reserves fall 4.17% to $7.5bn

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  • SBP-held forex reserves drop to $7,498.7 million.
  • Overall forex reserves stand at $13,378.2 million.
  • Reserves expected to register gains next week.

KARACHI: State Bank of Pakistan (SBP)-held foreign exchange reserves declined by 4.17% in line with the dominant trend for the last several weeks.

The foreign currency reserves held by the SBP were recorded at $7,498.7 million as of November 25, down $327 million compared with $7,825.7 on November 18, data released by SBP showed.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13,378.2 million.

Net reserves held by banks amounted to $5,879.2 million. The central bank cited external debt repayment as the reason behind this decline.

With the current foreign exchange reserves position, Pakistan has an import cover of fewer than 1.6 months.

The reserves are expected to register gains next week as the Government of Pakistan received $500 million from Asian Infrastructure Investment Bank (AIIB).

The Ministry of Finance, in its tweet, had said that funds are deposited with SBP and “will augment Pakistan’s reserves”.

The development did not reflect in SBP’s data as the amount was received after the cut-off date. The assistance will reflect in the reserves next week.

However, Pakistan has to repay a $1.08 billion international bond, which matures on December 5.

This payment might put additional pressure on the already depleting foreign exchange reserves as SBP Governor Jameel Ahmad last week, in the post-monetary policy briefing, revealed that the payment will be made three days before its due date i.e. December 5.

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Finance Minister: A “big” IMF program is coming for Pakistan.

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Speaking at the Karachi Stock Exchange ceremony, the Finance Minister announced that meetings with IMF representatives would take place in Washington on April 14 and 15.

He applauded the caretaker government’s effort to bring about economic stability and predicted that the nation’s economy would stabilize with improved economic policies.

Muhammad Aurangzeb emphasized that in order to move the country’s economy toward stabilization, structural reforms must be implemented.

He restated that the nation’s recovery from the economic crisis depends heavily on the stock market. The stock market is, nevertheless, trending upward.

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Pakistan is still classified as a secondary emerging market by the FTSE.

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The nation could perhaps be demoted, according to the worldwide index provider, since its index weight has decreased over the previous few years.

Pakistan’s market capitalization peaked in 2017 at $100 billion, but it fell to $21 billion by 2024, according to a Bloomberg research.

It did, however, state that Pakistan’s standing as a secondary emerging market will remain unchanged due to favorable political changes brought about by the establishment of a stable government.

Bloomberg saw Shehbaz Sharif’s election as prime minister, who is open to reform, as a step in the right direction for the nation struggling financially.

Shehbaz Sharif, the president of the Pakistan Muslim League-Nawaz, was chosen on March 4 to serve as the country’s 24th prime minister.

With 201 votes, PM Shehbaz defeated Omar Ayub Khan of the Sunni Ittehad Council (SIC) by 92 votes.

over the economy, earlier this month, Pakistan and the International Monetary Fund (IMF) came to an agreement at the staff level over the second and last review conducted under Pakistan’s Stand-By Arrangement.

The IMF secured a staff-level agreement with Pakistan on the second and final review of the nation’s stabilization program, which is backed by the IMF’s US$3 billion (SDR2,250 million) SBA authorized, according to the official statement released by an IMF team led by Nathan Porter.

The remaining US$1.1 billion (SDR 828 million) of SBA access will be made available following the IMF Executive Board’s approval of the deal.

It was reported shortly after the February 8 election that the newly elected PML-N-led government intended to apply for a new IMF credit package.

Pakistan is anticipated to pursue a $6–8 billion loan program from the global lender, and the IMF will be contacted right once to begin negotiations for this. The sources went on to say that the IMF would have tighter requirements this time.

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PM Shehbaz Sharif: “A plan to digitize the tax system is underway.”

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In an address to the All Pakistan Newspapers Society delegation in Islamabad today, the prime minister announced that plans were in motion to update the tax collection system.

The prime minister added that efforts are underway to broaden the revenue base and that the Federal Board of Revenue (FBR) is fully digitizing.

He emphasized that the Tax Excellence Awards were a recent initiative by the government to support female entrepreneurs, exporters, and engaged taxpayers.

The government’s priorities, according to the prime minister, are institutional changes, austerity, domestic and external investment, and privatization of government-owned businesses.

Praiseing the media’s contribution to public awareness-raising and good governance, he called on the sector to successfully communicate the benefits of economic stability under SIFC.

Calling fake news a major problem, he emphasized the need for cooperation to combat it. Additionally, he extended an invitation to the press to back Pakistan’s administration in its endeavors for the country’s growth and well-being.

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