Pakistan's foreign reserves almost doubled over a week, as per the data released by the State Bank of Pakistan (SBP) on Thursday. The net foreign reserves with the SBP shot up to $8.7 billion in the week ending July 14. This was up from $4.5 billion worth of reserves as recorded in the week ending July 7, the data show.
Meanwhile, the total liquid reserves increased from $9.8 billion to slightly over $14 billion. The SBP’s reserves started declining at the beginning of 2022. It fell from $17.6 billion on January 7 to $5.6 billion on December 30 that year. The reserves hit the lowest level at $2.92 billion on February 3.
The big boost to the reserves was noted after the cash-trapped Pakistan received $2 billion from Saudi Arabia, $1.2 billion from the International Monetary Fund (IMF) under a $3 billion standby arrangement and $1 billion from the United Arab Emirates, Dawn reported citing the SBP statement.
This, however, does not include the rollover of a $600 million loan from China announced by Prime Minister Shehbaz Shari, which is expected to further shore up the SBP’s reserves.
Meanwhile, as per a report on Friday, China agreed to reschedule over $2 billion debt of Pakistan for a period of two years.
Pakistan has built two nuclear power plants in Karachi that have a combined generation capacity of 2,117 megawatts. The total cost of the plants is $9.5 billion, including the $6.5 billion financing from China. The loan was extended by the Export-Import (Exim) Bank of China.
Of $2 billion, over $625 million was maturing in this fiscal year that will now be paused. The $6.5 billion is a publicly guaranteed debt, and over $2 billion repayments were maturing in two years that China has agreed to make a pause on, senior officials were quoted by PTI as saying.
In July this year, the IMF approved a new short-term bailout package for Pakistan amounting to $3 billion. The Pakistan government and the IMF reached a long-awaited staff-level agreement after months-long negotiations that pushed the country to the brink of default.
"I am pleased to announce that the IMF team has reached a staff-level agreement with the Pakistani authorities on a 9-month stand-by arrangement in the amount of SDR 2,250 million or $3 billion," a statement by IMF official Nathan Porter said.
However, two leading global rating agencies — Moody’s Investors Service and Fitch Ratings — had warned that the risks pertaining to Pakistan's financial stability might linger as the cash-strapped country stares at a $25-billion debt repayment in the current fiscal year.
First Published: Jul 21, 2023 4:06 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Karnal Lok Sabha seat: BJP's Manohar Lal Khattar faces tough fight amid farmer discontent
May 23, 2024 9:47 PM
What is Form 17C—the clause in debate over disclosure of voter turnout data
May 23, 2024 9:19 PM
Lok Sabha elections 2024: All you need to know about sixth phase
May 23, 2024 4:50 PM