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Pakistan’s forex reserves reach record high of $27.4 billion

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KARACHI: Pakistan’s liquid foreign exchange reserves hit an all-time high of $27.4 billion after the country received $2.75 billion from the International Monetary Fund under its new allocation of Special Drawing Rights (SDRs) equivalent to $650 billion, the largest in the IMF’s history.

However, the official announcement regarding the forex reserves is still awaited.

Analysts said with the fresh inflows the official reserves of the central bank would reach a historic high of $20.4 billion.

Recently, Finance Minister Shaukat Tarin had said that the transfers from the IMF under the fresh allocations would help the country ease pressure in external payments.

Further, the foreign exchange reserves of the country, as well as the central bank are likely to hit record high.

A day ago, Kristalina Georgieva, managing director of the IMF, had said that the new allocation of $650 billion is the largest allocation of Special Drawing Rights (SDRs) in IMF’s history.

“The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis,” she added.

The SDR allocation will provide an additional liquidity to the global economic system, supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt.

The countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.

“[The] SDRs are being distributed to countries in proportion to their quota shares in the IMF. This means around $275 billion is going to the emerging and developing countries, of which the low-income countries will receive around $21 billion, equivalent to as much as 6 per cent of GDP in some cases,” she added.

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The Groucho

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