Pakistan’s foreign exchange reserves have dropped to a worrisome level of less than $3 billion, the lowest in nine years. This means that the country only has enough foreign currency to cover its imports for a little over two weeks.
The State Bank of Pakistan (SBP) reported a decrease of $170 million in foreign exchange reserves to $2.92 billion. This drop was primarily due to the repayment of external debts in the week ending February 3, 2023. The decrease in reserves increases the risk of Pakistan defaulting on its foreign debt repayments.
Despite the challenging situation, Finance Minister Ishaq Dar remains hopeful about the revival of the loan program with the International Monetary Fund (IMF). Discussions with the IMF have been ongoing for ten days and are expected to conclude soon. The finance minister is aiming to secure a $6.5 billion loan program from the IMF to address the country’s financial difficulties.
