Karachi, (Asian independent) Pakistan’s foreign exchange market is tense on reports about the expected higher dollar outflows, local media reported.
State Bank of Pakistan (SBP) is currently burdened with arranging $1.8 billion for repayment of a Chinese loan due in March, Dawn reported.
“The Ministry of Finance has yet not provided local currency equivalent to $1.8bn to the State Bank for making payment to China,” finance ministry sources said.
Despite higher outflows of profits and dividends on foreign investments during the first seven months of the current fiscal year, the stuck-up amount is more than what had been repatriated.
The sources said the local currency against $800 million has been provided but the Pakistan central bank is reluctant to repatriate this amount, Dawn reported.
The SBP has been striving to maintain its foreign exchange reserves above $8bn to ensure exchange rate stability. However, several repayments are in queue for debt servicing, profits outflows and other dues.
During the first seven months of FY24, the current account deficit was $1 billion against $3.8 billion in the same period of last year. However, the increasing imports could widen the CAD to a much higher level till the end of this fiscal year on June 30.
Financial sector experts said the country has no clue how to raise dollars from anywhere except the International Monetary Fund (IMF) and other lending agencies. However, convincing the lenders for more loans would not be easy, Dawn reported.
