Pakistan continues to suffer from economic and political unrest, the rupee hit yet another record low on Thursday. The State Bank of Pakistan’s reserves dropped almost to a precariously low level of $3.09 billion.
Data from the State Bank of Pakistan (SBP) show that due to external debt repayment, its reserves decreased by 16% in the week ending January 27 to $3.09 billion, barely enough to cover less than three weeks of imports.
The reserves are at their lowest since February 2014 and can only cover 18 days’ worth of imports, the smallest import cover since 1998. The total liquid reserves of the nation were $8 point 74 billion, the SBP reported, with commercial banks holding $5 point 65 billion in reserves.
Pakistan is in dire need of fresh inflows and the resumption of the IMF program as soon as possible to avoid the crisis.
Pakistan and the International Monetary Fund (IMF) are in talks to release much-needed funds as part of a stalled bailout program. A positive outcome with the IMF would also assist in releasing funds from other platforms awaiting approval from the lender.
Tuesday saw negotiations between the government and the IMF to release money from a $7 billion bailout to prevent an economic collapse. The discussions, which will continue until February 9, are meant to end the IMF’s 9th review of its Extended Fund Facility, which is intended to assist nations facing balance-of-payments crises.