Economy

Another red flag goes up as Pakistan’s forex reserves dip below $8 billion mark

Pakistan’s foreign exchange reserves have dipped below the psychological $8 billion mark to touch $7.8 billion during the week ended September 30. On September 23, the State Bank of Pakistan held forex of $8,005.9. In a week, the reserves dipped by $106 million.

The reduction in forex was due to the external debt repayment which also includes interest payments on Eurobonds.

Amid the financial crisis, Pakistan Finance Minister Ishaq Dar has requested China to rollover $2 billion in State Administration of Foreign Exchange (SAFE) deposits due in March 2023.

The country’s forex reserves are weakening despite the financial assistance that it received from the International Monetary Fund and its other friendly countries.

On Thursday, citing increased government liquidity and external vulnerability risks, ratings agency Moody’s Investor Service cut Pakistan’s sovereign credit rating by a notch to Caa1 from B3.

“The decision to downgrade the ratings to Caa1 is driven by increased government liquidity and external vulnerability risks and higher debt sustainability risks, in the aftermath of devastating floods that hit the country since June 2022. The floods have exacerbated Pakistan’s liquidity and external credit weaknesses and vastly increase social spending needs, while government revenue is severely hit,” it said in a statement.

Dar however hit back at the rating agency. He warned of a “befitting” reply if the agency did not reverse the downgrade of Pakistan’s sovereign credit rating, Pakistan Observer said.

The currency has been strengthening since Dar took over as the finance minister of the country, replacing Miftah Ismail.

On Friday it closed at 219.92 to a US dollar, gaining Rs 2.02.

Also read: Pakistan’s new Finance Minister will find it hard to clear the financial mess

IN Bureau

Recent Posts

VINBAX 2024: Vietnam-India bilateral army exercise concludes at Kaushalya Dam

The fifth edition of the historic Indo-Vietnam Joint Field Training Exercise, VINBAX-2024, successfully concluded its…

14 hours ago

India-Russia strengthen defence ties at 22nd Working Group meeting on military technical cooperation

The 22nd meeting of the India-Russia Working Group on Military technical cooperation and defence industry…

15 hours ago

“I want to have strong representation of India at World Nuclear Exhibition 2025”: Sylvie Bermann

Sylvie Bermann, President of the World Nuclear Exhibition expressed confidence in India's nuclear supply chain…

16 hours ago

PoJK: Joint Awami Action Committee protests against government following new ordinance, many injured

Joint Awami Action Committee core member Shaukat Nawaz Mir has condemned the attack of police…

16 hours ago

PM Modi meets 31 world leaders, heads of organisations during his 3-nation foreign visit

Prime Minister Narendra Modi participated in 31 Bilateral Meetings and informal interactions with global leaders…

19 hours ago

India- Australia conduct 11th Indian Air Force-Royal Australian Air Force Air Staff Talks

India and Australia conducted the 11th edition of the Indian Air Force and Royal Australian…

19 hours ago