Pakistan’s forex reserves drop to 8 year-low level

Pakistan’s foreign exchange reserves held by its central bank has fallen by $294 million in a week to $5.821 billion – just enough to cover imports for a little more than a month. This is the lowest in about eight years. Amid the depleting forex reserves, Pakistan will have to make a repayment of $1 billion to two foreign banks by early next month. In the next three months the country will have to make a repayment of more than $8 billion. In the next three years, Pakistan’s repayment obligations will be $75 billion. 

The country would have to make a debt repayment of more than $30 billion in the current fiscal year. According to Geo TV, a sum of $6 billion has been repaid and the country is expecting to roll over another $4 billion.

Pakistan’s Finance Minister Ishaq Dar however said that the country will not default.

“Conditions are tight, but Pakistan will move forward. Pakistan will not default,” he said.

“I admit that we do not enjoy the same level of foreign exchange reserves we left back in 2016. But that is not the government’s fault, the fault is in the system and we must ensure that every stakeholder takes part in carrying the country forward,” he said. In 2016, Pakistan’s forex reserves were at $24 billion.

In July, this year—the beginning of the fiscal year for Pakistan, the foreign exchange reserves were at $8.3 billion.

Pakistan’s problem has aggravated with the delay in the ninth review meeting with the International Monetary Fund over the loan programme. Until Pakistan gets further assistance from the IMF, it will be difficult for Islamabad to tide over the crisis.

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