Pakistan foreign exchange reserves have declined to below $7 billion regardless of the detail that the country established two billion dollars from Saudi Arabia just now.
The country's foreign exchange reserves have declined to $6.9 billion during the week ended on January 11, 2019. The State Bank of Pakistan held reserves have summary by $147 million in just one week period mainly due to loan reimbursement and other financings. The current reserves are sufficient to cover only six weeks import bill of the country.
The treasury is raucously moribund regardless of the fact that government had conventional two billion dollars from Saudi Arabia in the last two months. "The reserves are under heaviness due to massive reimbursement against previous loans", said an official of the State Bank of Pakistan. He further said that Pakistan has to pay $9.06 billion loans (principal amount $ 7.27 billion and $ 1.787 billion interest) in the ongoing financial year 2018-19.
However, he educated that reserves would surge to over $10 billion within the next few days, as Pakistan is expecting to obtain inflows from Saudi Arabia and United Arab Emirates (UAE). "Saudi Arabia will deposit remaining one billion dollars of three billion dollars that were dedicated. Similarly, we are expecting UAE will deposit $3 billion in one installment," he added.
Pakistan is also hopeful to receive around two billion dollars from China. However, the Chinese authorities have not finalized the package yet.
It is worth mention here that the international credit agency, Moody's Investors Service, in its report last week, said Pakistan does not have enough foreign swap reserves to pay its public and private external debt due over this year. "Foreign exchange reserves are low, and gross borrowing necessities are large in Pakistan, threatening the ability of these governments to refinance debt and fund deficits affordably".
The credit score society said the total public and private external debt due over the next year is larger than foreign exchange reserves. Foreign exchange reserves are on the lower side in Pakistan. The lower reserves threaten government to refinance debt, it noted. Pakistan's foreign reserves declined to owe to persistent current account deficit. The reserves coverage of imports has also fallen, Moody's further said. "Reserves are now worth fewer two months of goods and services imports," the credit agency noted.
