17.4 C
January 24, 2020
Image default
Business Top Stories

Pakistan’s foreign exchange reserves held by Central Bank drop by 48% in 2018

KARACHI: Due to heavy repayment of loans and interest on loans, Pakistan lost its precious foreign exchange reserves of $6.33 billion in 2018, which is 31 percent less than the previous year.

According to statistics of State Bank of Pakistan (SBP), the foreign exchange reserves declined from $20.17 billion to $13.83 billion during FY 2018.

The exchange reserves held by the Central Bank reduced to $7.28 billion by the end of December 2018 as compared to the $14.1 billion recorded by the end of December 2017, showing a drop of 48 percent.

The depletion of foreign exchange reserves was quite massive even after the foreign inflows from friendly countries and loans from different foreign banks and agencies.

During this period, Pakistan received an amount of $2 billion from Kingdom of Saudi Arabia as a bailout package.

Pakistan received an amount of $2.2 billion from Chinese banks on the account of loans to manage the alarming situation.

Moreover, the country also received millions of dollars from various foreign agencies in the outgoing year.

Pakistan’s external debts and liabilities have rocked to a worrisome level of $96.7 billion US Dollars.

According to Moody’s Investors Service, Pakistan’s capability to pay back foreign loans could become much weaker if the loan amount increases further.

Moody’s said that Pakistan is facing elevated external pressures stemming from strong domestic demand and capital-import heavy investments related to the China-Pakistan Economic Corridor (CPEC).

PTI-led government has been struggling hard to bring stability in the flagging economy, which is badly affected by heavy debts and liabilities.

The government is working hard to generate financial assistance from UAE and China including investments from Saudi Arabia, Turkey, and countries in different sectors to attract foreign exchange inflows for better reserves position.