Pakistan has assured the International Monetary Fund (IMF) that it will take comprehensive measures to increase its gross foreign exchange reserves by $7.65 billion. The country aims to raise the reserves from the current level of $4.056 billion in the financial year 2023 to $11.7 billion by the end of the financial year 2024.
This commitment was made under a $3 billion stand-by arrangement (SBA) for nine months, with the intention of building a buffer of reserves to mitigate any external shocks to the national economy.If the gross foreign exchange reserves reach $11.7 billion by June 2024, they will be sufficient to cover 1.8 months of imports of goods and services.
The balance of payment (BoP) chart agreed upon by Pakistan and the IMF indicates that the projected disbursements of foreign loans during the current financial year 2023-24 will amount to $15.01 billion from multilateral and bilateral creditors. To secure external financing, Pakistan is seeking an additional deposit of $2 billion from the Kingdom of Saudi Arabia and $1 billion from the United Arab Emirates (UAE).
The Islamic Development Bank (IsDB) has also agreed to provide a $1 billion loan program. Additionally, program loans and project financing from the World Bank, Asian Development Bank, and Asian Infrastructure Investment Bank (AIIB) are being pursued, aiming for a total disbursement of $15 billion from all sources.
Pakistan will also engage with bilateral partners, particularly China, Saudi Arabia, and the UAE, to roll over their existing deposits of $2 billion, $3 billion, and around $2 billion, respectively, in the current fiscal year.
The IMF executive board is scheduled to meet on July 12, 2023, to consider Pakistan’s request for approving the