Pakistan’s Soaring External Debt And Foreign Reserves
Pakistan’s Soaring External Debt And Foreign Reserves: After months of decline Foreign exchange reserves held by the State Bank of Pakistan (SBP) increased 0.08% on a weekly basis, according to data released by the central bank.
The country’s foreign exchange reserves had been on a downward spiral for weeks and had depleted significantly, sparking concern over Pakistan’s ability to meet future payment obligations and manage a bulging current account deficit.
On June 1, foreign currency reserves held by the central bank were recorded at $10,041.6 million, up $7.8 million or 0.08% compared with $10,033.8 million in the previous week.
Overall, liquid foreign reserves held by the country, including net reserves held by banks other than the SBP, stood at $16,419.6 million. Net reserves held by banks amounted to $6,378 million.
With the end of PML-N’s term, SBP’s reserves stand at just $10.03b
In April, SBP’s reserves increased $593 million due to official inflows. Pakistan also raised $2.5 billion in November 2017 by floating dollar-denominated bonds in the international market in a bid to shore up official reserves.
A few months ago, foreign currency reserves surged due to official inflows including $622 million from the Asian Development Bank (ADB) and $106 million from the World Bank.
Earlier, the SBP received $350 million under the Coalition Support Fund (CSF). In January, the SBP made a $500-million loan repayment to the State Administration of Foreign Exchange (SAFE), China.
Pakistan’s External Debt
Pakistan’s external debt and liabilities have soared to a record $91.8 billion, showing an increase of over 50% or nearly $31 billion in the past four years and nine months, the State Bank of Pakistan (SBP) has reported.
The external debt and liabilities of $91.8 billion as of March-end suggest that the figure may touch $100 billion very soon as the country faces grave challenges in meeting growing external financing requirements. Pakistan is scheduled to make some bullet debt and interest payments in the last quarter (April-June) of the current fiscal year, according to sources in the finance ministry.
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