ISLAMABAD: Pakistan's foreign exchange reserves have increased to $3.8 billion after refinancing of $700 million by the China Development Bank (CDB), local media reported on Thursday, as the South Asian country continues to scramble for external financing.
Cash-strapped Pakistan has been making desperate attempts to secure external financing to stave off a balance-of-payment crisis, with its forex reserves depleting to critically low levels, currency hitting new lows against dollar and inflation at a multi-decade high.
The country is immediately looking for a $1.2 billion loan tranche from the International Monetary Fund (IMF), as part of its $7 billion bailout program, to keep the economy afloat.
Finance Minister Ishaq Dar last week said the Pakistani central bank had received $700 million funds from the CDB that would help shore up the dwindling forex reserves.
"The [Pakistani] central bank, in its weekly bulletin, said that its foreign exchange reserves have increased by $556 million to $3,814.1 million," Pakistan's Geo News channel reported on Thursday.
The South Asian country now has an "import cover of around eight weeks," the central bank said.
The net foreign reserves held by commercial banks stand at $5.4 billion, taking the total liquid foreign reserves held by Pakistan to $9.2 billion, according to the report.
On Thursday, Pakistan’s currency plunged to a new record amid reports that the IMF had asked Pakistan to fulfill additional requirements, causing panic in weary markets.
The US dollar closed at Rs285.09 rising 6.66 percent against the Pakistani rupee, according to currency dealers and central bank data.
The finance minister, however, rubbished “malicious rumors” of Pakistan defaulting, adding that they were not only completely false but also “belie the facts.”
He said Pakistan’s foreign exchange reserves are higher by almost $1 billion than four weeks ago despite making external payments.
The release of IMF tranche, stalled since late last year, will unlock funding from other multilateral and bilateral donors too.
