The State Bank of Pakistan’s (SBP) foreign reserves saw a stunning outflow of $2.915 billion in the week ending March 25, 2022, representing a 19.5 percent week-on-week loss.
The reserves of the central bank have fallen to their lowest level since June 26, 2020, when they were $11.23 billion.
According to the SBP weekly report issued on Thursday, the country’s total liquid foreign currency reserves fell by $2.885 billion (-13.4 percent) to $18.55 billion on March 25, 2022, from $21.44 billion the previous week. SBP reserves fell by $2.91 billion to $12.05 billion last week, down from $14.96 billion the week before.
Meanwhile, commercial banks‘ net foreign reserves were $6.5 billion, a rise of $29.9 million from the previous week. This drop is due to the repayment of foreign debt, which includes a large syndicated lending facility from China. This facility’s rollover is in the works and should be completed soon.
According to reports, China has agreed in principle to provide Pakistan with a one-year rollover of $2.5 billion in commercial loans. Beijing has previously approved a $2 billion loan rollover in the recent past. Overall, China has approved a $4.5 billion loan rollover to assist Islamabad in managing its external sector risks.
Shah Mehmood Qureshi, Pakistan’s Foreign Minister, is now in China. He acknowledged in his video message that China had agreed in principle to roll over debts for which Pakistani officials had made a new request.
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