According to data released on Thursday, the foreign exchange reserves held by the State Bank of Pakistan (SBP) have been decreasing by 3.46 percent every week. Moreover, on May 27, the foreign currency reserves held by the SBP were recorded at $9.723 billion, down $366 million compared with $10.089 billion on May 20.
SBP Foreign Exchange Reserves are Currently at a 128-Week Low
The State Bank of Pakistan reserves are currently at a 128-week low, the lowest level since December 2019. The central bank said that the drop in the foreign exchange reserves was due to the external debt payment. Overall liquid foreign currency reserves held by the country, including net foreign exchange reserves held by banks other than the SBP, stood at $15.771 billion. Net reserves held by banks amounted to $6.049 billion.
Conditions for Refinancing a $2.3B Deposit by Chinese Banks Have Been Agreed
In addition to this, Finance Minister Miftah Ismail announced on Thursday that the terms and conditions for refinancing a $2.3 billion deposit by Chinese banks have been agreed upon. The deposit from the Chinese banks will give much-needed support to the country’s reserves.
The news of the agreement with the Chinese Banks comes as a major relief as the country remains embroiled in an uncertain economic condition due to the delay in the revival of the bailout program of the International Monetary Fund (IMF).
“Good News: The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about US$ 2.3 billion) have been agreed. Inflow is expected shortly after some routine approvals from both sides. This will help shore up our foreign exchange reserves,” the minister said in a tweet.
Good News: The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about US$ 2.3 billion) have been agreed. Inflow is expected shortly after some routine approvals from both sides. This will help shore up our foreign exchange reserves.
— Miftah Ismail (@MiftahIsmail) June 2, 2022
Read more: SBP’s Reserves Fall by Another $75 Million