KARACHI: Pakistan’s foreign exchange reserves increased by $18 million to $4,319.1 million in the week ending March 10, compared to $3,814.1 million in the previous week, the central bank said on Thursday.
During the week ended Mar 10, State Bank of Pakistan reserves increased by $18 million.
The development comes after the Industrial and Commercial Bank of China approved the rollover facility of $1.3 billion, which was earlier repaid by Pakistan to ICBC in recent months.
“Documentation for second disbursement of US$500 million has been completed by Finance Ministry for release of funds to the State Bank of Pakistan!” Finance Minister Dar said in a tweet on Thursday.
Pakistan is awaiting a bailout package of $1.1 billion from the IMF that has been delayed since November over issues related to fiscal policy adjustments.
The funds are part of a $6.5 billion bailout package the IMF approved in 2019, which analysts say is critical for Pakistan to avert defaulting on external payment obligations.
The deal will also unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves, which have fallen to four weeks worth of import cover.
The IMF wants Pakistan to get the assurance for up to $7 billion to fund this fiscal year’s balance of payments gap. Dar has been saying it should be around $5 billion.
Pakistan needs $6 billion in new loans to bridge the financing gap, a concern raised by the International Monetary Fund during talks with Pakistan. Saudi Arabia, the United Arab Emirates, and Qatar have not yet given these loans despite repeated requests by Pakistan.
“At the time of previous reviews, certain friendly countries have made commitments to bilaterally support Pakistan. What IMF is now asking is that they should actually complete and materialise those commitments. That is the only delay,” Finance Minister Ishaq Dar said at the special Senate session on Thursday.
Pakistan has responsibility for external debt servicing and a current account deficit that is around $9 to $10 billion, according to economic expert Mehtab Haider.
The international lender was concerned about the large fiscal gap that aroused after the targets were met and decided under the annual budget, he told Aaj News last month.
