KARACHI: The foreign exchange reserves, held by the central bank, increased 0.47% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.
Earlier, the reserves plunged to $6,636.1 million, which raised concern over Pakistan’s ability to meet its financing requirements. However, the first tranche of $1 billion from the United Arab Emirates (UAE) and the last tranche of $1 billion from Saudi Arabia for balance of payments support pushed the reserves above $8 billion.
Moreover, China and the UAE have agreed to provide more cushion for the fast depleting reserves.
On February 1, the foreign currency reserves held by the SBP were recorded at $8,192.5 million, up $38 million compared with $8,154.3 million in the previous week. The SBP report stated no reason for the increase of $38.2 million.
Overall, the liquid foreign currency reserves, held by the country, including net reserves held by banks other than the SBP, stood at $14,885.1 million. Net reserves held by banks amounted to $6,692.6 million.
In November last year, Chinese Embassy Deputy Head of Mission Zhao Lijian assured Pakistan of a financial package to boost its flagging foreign currency reserves, hinting that it would be bigger than that pledged by Saudi Arabia.
With the anticipated $2.5 billion in deposits agreed recently, China’s contribution in this fiscal year alone will surge to $4.5 billion.
Earlier, the reserves dipped to $9.06 billion, forcing the central bank to let the rupee depreciate massively for the fourth time since December 2017 and sparking concern about the country’s ability to finance a hefty import bill as well as meet debt obligations in coming months.
In April, the SBP’s reserves increased $593 million due to official inflows. A few months ago, the reserves surged due to official inflows including $622 million from the Asian Development Bank (ADB) and $106 million from the World Bank.
The SBP also received $350 million under the Coalition Support Fund (CSF) earlier.
In January last year, the SBP made a $500-million loan repayment to the State Administration of Foreign Exchange (SAFE), China.