A day ago, Pakistan’s central bank said that its official liquid foreign exchange reserves have fallen by $754 million to $8.57 billion, marking another sharp drop in the country’s fast depleting reserves.
“During the week ended on 22-Jul-2022, SBP’s reserves decreased by $754 million to $8,575.1 million due to external debt and other payments,” the central bank had said in its weekly statement on reserves.
The Nikkei Asia report quoted sources as saying that the Pakistan army chief had made an appeal to the White House and treasury department to push IMF to supply $1.2 billion relief package that the country is due to receive under a loan programme resumed recently.
Last week, the IMF had said that it reahed a staff-level agreement with Pakistan that would pave the way for disbursement of $1.17 billion, if approved by the IMF board, and was considering topping up the programme.
The country had entered a 39-month, $6 billion IMF programme in 2019, but less than half of the amount has been disbursed to date as Islamabad has struggled to keep targets on track.
The programme was put on hold by IMF after former Prime Minister Imran Khan’s government was ousted in April.
Even though finance minister Miftah Ismail said the nation has averted a default, its debt is trading at distressed levels.
High price of energy imports has been pushing Pakistan to the brink of a balance of payments crisis. Its foreign currency reserves have fallen so low that it is hardly enough for five weeks of imports. The Pakistani rupee has also weakened to record lows against the US dollar.
The new government has withdrawn the unfunded subsidies that the previous prime minister, Imran Khan, gave to the oil and power sectors during his last days in office. On July 1, it also imposed a levy on petroleum that will raise prices by about 70% within a month.