During the week ending June 9, 2023, the State Bank of Pakistan (SBP) witnessed a rise in its foreign exchange reserves by $107 million, reaching a total of $4 billion.
However, media reports emerged stating that Pakistan had paid $1 billion to China, resulting in a decline of SBP reserves to $3 billion. The finance ministry refrained from confirming or denying this report.
Finance Minister Ishaq Dar expressed his disappointment with the International Monetary Fund (IMF) and its handling of Pakistan’s bailout package, stating that the lender is wasting his time.
The $6.7 billion loan program, which was expected to be completed by June 30, required two installments of approximately $2.2 billion to be received before the deadline.
However, the IMF raised concerns regarding the budgetary measures for the financial year 2023-24, and rating agencies warned that Pakistan is running out of time to convince the Fund for the crucial bailout package.
Analysts have highlighted Pakistan’s ongoing struggle with poor foreign exchange reserves throughout the financial year 2023, and the situation is expected to persist in the following fiscal year, regardless of IMF support.
The SBP reported a total of $9.378 billion in foreign exchange reserves for the country, with $5.359 billion held by commercial banks.
The low level of foreign exchange reserves has negatively