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Central Bank of Pakistan running out of reserves

The foreign exchange reserves held by the Central Bank of Pakistan (SBP) fell another $15 million to $6.7 billion. This was the lowest amount of foreign currency the country has held in almost the last 4 years.

According to reports in the national media, the Central Bank of Pakistan (SBP) announced that its foreign exchange reserves, which were $6.715 billion on December 2, decreased by another $15 million.

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Thus, the amount of foreign currency held by SBP decreased to 6.7 billion dollars. This was the lowest amount of foreign currency the country has held in almost the last 4 years.

The country has foreign currency that can meet imports for about a month.

Pakistan needs urgent funds to cover its debt obligations and current account deficit.

The Islamabad government has more than $30 billion in external finance payments in the next fiscal year.

 

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Approval for sugar exports to increase reserves

The Economic Coordination Committee approved the export of 100,000 metric tons of sugar to increase the country’s foreign exchange reserves.

According to the data shared by the Pakistan Bureau of Statistics, there was a 7.75 percent decrease in the production of large-scale industries such as textiles, machinery and automobiles in October.

Experts warn that the rise in energy and raw material prices is causing an economic slowdown.

2nd most expensive country in South Asia

The Asian Development Bank (ADB), in its report sharing the outlook for 2022, announced that Pakistan is the second most expensive country in South Asia after Sri Lanka.

The report stated that inflation in Pakistan will continue to increase in the coming months and the Pakistani rupee may experience depreciation.

The report, which predicts that energy will be even more expensive in Pakistan, pointed out that the floods in the country reduced economic growth.

It is stated that the current inflation in Pakistan is around 24 percent.

Negotiations with IMF unclear

The expected credit from the International Monetary Fund (IMF) is suspended because the 9th evaluation meeting has not started yet.

It is reported that negotiations will begin after Pakistan fulfills its commitments on taxes on petroleum products and takes other measures within the scope of the agreement with the IMF.

The uncertainty in the negotiations with the IMF not only increases the pressure on the local currency of the country, but also worries foreign investors.

Finally, it is stated that the political developments between the government of Shahbaz Sharif and former Prime Minister Imran Khan negatively affected the markets.

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