Forex reserves continue bleeding trend as govt amasses $7.6 billion in loans

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ISLAMABAD, MAR 22 (DNA) –  The foreign exchange reserves held by the central bank continued to bleed even after the government borrowing spree continued and amassed a whopping $7.6 billion of loans. As the forex reserves keep their depletion trend, the country requires $5-$7 billion to keep them adrift. The central bank has no other tool at its disposal to halt the fall in foreign exchange reserves aside letting the rupee devalue against the dollar.

Due to the central bank’s intervening twice in the currency markets in last three months, the country’s public debt has surged by around Rs830 billion due to rupee depreciation against the dollar.

This would also add to debt servicing costs increasing in outgoing financial year 2017-18.

Official sources said the rupees depreciation against the dollar from Rs105 to Rs116 would add to the public debt to surge by Rs830 billion during present FY 2017-18, compared to $83 billion at end of FY 2016-17.

And the government is considering offering an amnesty scheme for non-Pakistani nationals to declare their offshore assets, which would enable to bring back $4-5 billion but remains contingent since the country requires dollar inflows of $6 to $10 billion to offset the impact of sliding forex reserves.

Pakistan obtained $7.608 billion loans from bilateral and multilateral creditors during the first eight months of present (July-February) of FY 2017-18.

The projected loans to be obtained by the government in this financial year’s budget was determined at $8.094 billion during 2017-18.

The country received $1.129 billion from China, Canada $0.16 million, Asian Development Bank (ADB) $546 million, Asian Infrastructure Investment Bank (AIIB) $17.01 million, Islamic Development Bank $873 billion, international bonds $2.5 billion, commercial loans $1.77 billion, Japan $73 million, Multi Donor Trust $38 million, USA $42 million grant, UK $134 million grant, World Bank’s IBRD $220 million, IDA $55.72 million and Saudi Arabia $40.74 million during first eight months of FY 2017-18.