Foreign exchange: SBP reserves dip 2.62%, stand at $7.3b

[Ryuzaki]

KARACHI: Foreign exchange reserves held by the central bank continued to spiral downwards for the 13th successive week as they fell 2.62% on a weekly basis, according to data released on Thursday.

The continued drop in the reserves is alarming as it raises concern about Pakistan’s ability to meet its financing requirements because the reserves have fallen below the $7.5-billion mark.

Although the Saudi government has released $1 billion under the promised $3-billion financial assistance, the impact is yet to be seen.

On the other hand, Chinese Embassy Deputy Head of Mission Zhao Lijian has assured Pakistan of a financial package to boost its flagging foreign currency reserves, hinting that it would be bigger than that pledged by Saudi Arabia.

On November 16, the foreign currency reserves held by the State Bank of Pakistan (SBP) were recorded at $7,286.5 million, down $196.4 million compared with $7,482.9 million in the previous week.

The decrease was attributed to external debt servicing and other official payments.

The SBP received $1 billion on November 19 as placement of funds by Saudi Arabia, after which the SBP’s reserves stood at $8,293.9 millionand total liquid foreign reserves at $14,722.4 million, the release added.

Overall, liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13,715 million. Net reserves held by banks amounted to $6,428.5 million.

A month ago, China agreed to immediately give a loan of $2 billion to Pakistan, a move meant to arrest the slide in foreign currency reserves and provide much-needed breathing space for the new government.

Earlier, the reserves dipped to $9.06 billion, forcing the central bank to let the rupee depreciate massively for the fourth time since December 2017 and sparking concern about the country’s ability to finance a hefty import bill as well as meet debt obligations in coming months.

In April, the SBP’s reserves increased $593 million due to official inflows. A few months ago, the reserves surged due to official inflows including $622 million from the Asian Development Bank (ADB) and $106 million from the World Bank.

The SBP also received $350 million under the Coalition Support Fund (CSF) earlier.

In January, the SBP made a $500-million loan repayment to the State Administration of Foreign Exchange (SAFE), China.

https://tribune.com.pk/story/1852445/2-foreign-exchange-sbp-reserves-dip-2-62-stand-7-3b/

 

[Abdussamad]

The SBP also received $350 million under the Coalition Support Fund (CSF) earlier.

I thought the Americans stopped giving us money?

 

[Skull and Bones]

They will get required funds from Saudi, China and Malaysia.

 

[Ryuzaki]

I thought the Americans stopped giving us money?

Pakistan did receive CSF funds in early 2018

 

[Śakra]

All is good, that’s why ik sent the IMF back.

 

[FuturePAF]

The costly government supported entities should be put on notice. Their workers haven't been downsized, but if they want to still have a job within 3,6,12 months, they have to show profitability or else. 160 companies (such as PIA) were listed as bring down the government coffers. This bloated burden can not be sustained indefinitely.

These companies should be encouraged to diversify and seek other customers to earn income from their already sunk costs of labor and equipment. If workers are just sitting around with out work, for what ever reason, they can be asked to do other work the nation needs.

 

[maithil]

The costly government supported entities should be put on notice. Their workers haven't been downsized, but if they want to still have a job within 3,6,12 months, they have to show profitability or else. 160 companies (such as PIA) were listed as bring down the government coffers. This bloated burden can not be sustained indefinitely.

These companies should be encouraged to diversify and seek other customers to earn income from their already sunk costs of labor and equipment. If workers are just sitting around with out work, for what ever reason, they can be asked to do other work the nation needs.

Good plan. Fire all employees of loss making PSUs. That will save some money for government.

 

[FuturePAF]

Good plan. Fire all employees of loss making PSUs. That will save some money for government.

Not all the employees, but those that are not productive. At the very least, cut their hours like they do in Germany during down turns in the economy. Instead of working 5 days a week, go down to 3 days a week. Everyone still gets to feed their family just less for government workers, no one has to get fired except the most incompetent and politically appointed workers (PTI doesn't have that patronage legacy, hopefully). If they can get better work in the private sector they are free to work the other days there, but they are less of a burden on the Government coffers.

PIA is said to have 3.5 workers for every 1 worker in Emirates for the same number of Aircraft to operate. So if we cut the workers down to 2 or 3 days a week, they can look for other work on the other days, while PIA can get Lean and mean and win back its customers. When the Airline Is strong again, the workers can be brought back to full time.

The German Model should be studied in this regard.

 

[aman_rai]

Are avi to Dia tha China ne 1 ya 2 billion
Kuch mahine pahle ki hi baat h

 

[RIP Pak LAW]

Dip is because of loan payment.

 

[xyxmt]

I thought the Americans stopped giving us money?

if border is still open the CSF is still coming, dont pay attention to orange tweets.

 

[FuturePAF]

Dip is because of loan payment.

Even if its a loan payment, we have massive loan payments coming due in 2020/2021. we need to straighten this out ASAP or else we will be back here again in less then a year asking the world to help.

But thank you for clarifying it is not a continuation of bad management, just paying for the burden lumped upon us by the last government.

 

[ziaulislam]

I thought the Americans stopped giving us money?

they did..its copy paste journalist ...Pakistan hasnt received anything in 2018

Reserves are interestingly holding up without any inflows.
probably because the dramatic drop in CAD to half of what it was before(2b/month to 1b/month)

Saudis are expected to give 6b this year and oil prices are falling

If Pakistan does stick to reforms it might get away without IMF

if border is still open the CSF is still coming, dont pay attention to orange tweets.

Not coming..they have to be approved un cenate

 

[HalfMoon]

Dip is because of loan payment.

That explains.

 

[ziaulislam]

Anyway for idiots who insists..why..reserves are at 7.3 ..reserves a quoted weekly..we have received 1 b from the saudis..with low oil prices and oil credit as well..i think it would be a big relief (6b this year)

At this moment IMF payment would simply be extension of current loan