The foreign exchange reserves held by Pakistan’s central bank increased slightly to $8 billion in the week ending April 26. The increase was due to a $1.1 billion disbursement from the International Monetary Fund (IMF) as the last installment of a $3 billion loan program. The IMF’s executive board approved the funding after completing a review of Pakistan’s economic performance.
Pakistan’s central bank governor said that the country’s foreign reserves are now in a comfortable position. The bank actively paid off its commercial loans, resulting in a debt structure composed entirely of bilateral and multilateral loans. This shift has improved the maturity profile of the debt.
Analysts believe that the central bank is maintaining its reserves by buying dollars from the market. The bank is optimistic that it can maintain its $9 billion reserve level by June 2024, despite upcoming external payments of $1.8 billion.
Pakistan’s Finance Minister said that the country is in talks with the IMF for a new bailout program.The IMF is sending a mission to Pakistan in mid-May to kick off negotiations for a new bailout program. This mission aims to reach an agreement with Pakistan on the new program by the beginning of July.
Pakistan’s economy is facing challenges due to a large amount of debt that needs to be repaid in the coming year. The amount of debt is significantly greater than the foreign currency reserves held by the central bank.