KARACHI: Pakistan’s total liquid foreign reserves increased by $12 million to reach $13.4 billion as of August 11, 2023, according to the latest data released by the State Bank of Pakistan (SBP).

The foreign reserves held by the SBP rose to $8.1 billion, while the net foreign reserves held by commercial banks stood at $5.3 billion.

The SBP attributed the increase in its reserves to official inflows from multilateral and bilateral sources.

Pakistan’s foreign reserves have been under pressure due to the high current account deficit and debt servicing obligations. The country has been seeking financial assistance from various sources, including the International Monetary Fund (IMF), to boost its reserves and stabilize its economy.

The IMF approved a $6 billion loan package for Pakistan in July 2023, subject to certain conditions and reforms. The first tranche of $1 billion was disbursed immediately, while the remaining amount will be released in installments over a period of three years.

The IMF loan is expected to help Pakistan address its balance of payments crisis, restore fiscal discipline, and promote growth and development. However, it also comes with challenges and risks, such as implementing tough austerity measures, increasing tax revenues, reducing subsidies, and enhancing transparency and accountability.