SBP reserves fall to $4.5b after debt repayments to foreign banks

 Two separate repayments of $600 million and $415 million have been made to two Dubai-based banks, say sources.

ISLAMABAD:

The foreign exchange reserves held by the central bank fell to $4.5 billion after Pakistan returned over $1 billion loans of two foreign commercial banks, hardly enough to finance 25 days of import.

Two separate repayments of $600 million and $415 million have been made to two Dubai-based commercial banks, sources said on Saturday.

After the loans repayments, Pakistan is left with less than 25 days of import cover.

It is pertinent to mention here that the economic activities in the country have already been severely affected due to depleting reserves, devaluation of local currency and non-opening of letter of credits (LCs) for private companies.

Major industries including car manufacturing companies have temporarily closed their plants due to import restrictions.

Sources said that Pakistan is expecting to raise around $1.5 to $2 billion worth of funds in foreign aid during Geneva Conference to be held next week for the country’s flood victims.

Besides, efforts are also underway to arrange loans from Saudi Arabia and China.