Pakistan State Bank's reserves fall to $20 bn as debt rises under Imran Khan regime

According to data released by the State Bank of Pakistan on Thursday, foreign exchange reserves held by Islamabad's Central Bank dropped 0.61% on a weekly basis. The reduction is due to the external debt payments, the bank stated. On August 27, the foreign currency reserves held by Pakistan's Central Bank were recorded at USD 20,145.6 million, which went down by USD 123 million to USE 20,033.6 million on September 3, Pakistani media reported. The country's overall liquid foreign currency reserves, including net reserves held by banks apart from SBP, stood at USD 27,102.6 million. Of this, net reserves held by banks amounted to USD 7,080 million, the local media reported.

The country had received an allocation of SDRs (Special Drawing Rights) worth USD 2,751.8 million from the IMF (International Monetary Fund) on August 24, which led the foreign exchange reserves of the State Bank of Pakistan to go up to USD 20.15 billion. The reserves also bounced after seeing USD 2.5 billion in inflows from China. The Imran Khan administration had borrowed USD 2.5 billion through Eurobonds by offering profitable interest rates to the lender. Islamabad received the first portion of the loan of USD 991.4 million from the IMF in July 2019. It received the second tranche of USD 453 million in December 2019.

Last year, the State Bank of Pakistan had made a foreign debt repayment of more than USD 1 billion on the maturity of Sukuk (Sharia-compliant financial certificates).

Pakistan's debt rises to Rs 149 trillion under Imran Khan government

As per the annual report by SBP released last week, Pakistan's financial woes intensified under Prime Minister Imran Khan three-year tenure. Islamabad's debt's current stands at 399 trillion. Pakistan's economy, which was already struggling to stay afloat, was hit hard by the COVID-19 pandemic.

"The annual report released by State Bank of Pakistan shows government debts at 399 trillion and of this, debts rose by Rs 149 trillion during three years under PTI and this debt raised by the PTI government is equal to 80 per cent of debts raised by Pakistan Peoples Party (PPP) and Pakistan Muslim League-Nawaz (PML-N) during ten years of their rule," the local media had reported.

Image: AP