KARACHI: The foreign exchange reserves held by the central bank increased 0.99% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.
Earlier, the reserves had spiralled downwards, falling below the $7-billion mark, which raised concern over Pakistan’s ability to meet its financing requirements. However, financial assistance from the United Arab Emirates (UAE) and Saudi Arabia helped shore up the foreign exchange reserves.
China and the UAE have agreed to provide more cushion for the fast depleting reserves.
On March 1, the foreign currency reserves held by the SBP were recorded at $8,116.5 million, up $79.7 million compared with $8,036.8 million in the previous week. The SBP cited no reason for the increase in its report.
Overall, the liquid foreign currency reserves, held by the country, including net reserves held by banks other than the SBP, stood at $14,956.2 million. Net reserves held by banks amounted to $6,839.7 million.
In November last year, Chinese Embassy Deputy Head of Mission Zhao Lijian assured Pakistan of a financial package to boost its 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 the current 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 last year, 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.