Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased another $497 million in the period between May 27 to June 3 to stand at $9.23 billion, said the central bank on Thursday, with the level staying at less than 1.5 months of import cover.

The SBP said the reserves decreased due to external debt repayment.

In the week ending May 27, the level had decreased by $366 million to $9.72 billion.

Meanwhile, liquid foreign reserves held by the country stood at $15.18 billion as of June 3, the SBP said in a note. Reserves held by commercial banks clocked in at $5.95 billion.

Finance Minister Miftah Ismail unveiled the Economic Survey 2021-22 on Thursday and expressed hope that foreign exchange reserves held by the State Bank of Pakistan (SBP) would rise to $12 billion in coming days after the inflow from China is recorded.

The finance minister said foreign exchange reserves have fallen, but will increase to around $12 billion after “we receive $2.4 billion from China in coming days”.

Reserves held by the SBP have been on a declining trend, with Pakistan desperately seeking revival of the International Monetary Fund (IMF) programme, hoping it will pave way for lending from other sources as well.

Last month, the IMF mission concluded its talks with Pakistan authorities without a word on reviving the stalled Extended Fund Facility (EFF).

In its statement, the IMF mission said deviations from the policies agreed in the last review, partly reflecting the fuel and power subsidies announced by the authorities in February, require urgency of concrete policy actions, including in the context of removing fuel and energy subsidies and the FY2023 budget, to achieve programme objectives.

“The mission has held highly constructive discussions with the Pakistani authorities aimed at reaching an agreement on policies and reforms that would lead to the conclusion of the pending seventh review of the authorities’ reform program, which is supported by an IMF EFF arrangement,” said the IMF in its statement at the conclusion of talks.

This article was originally published in Business Recorder on June 9, 2022.