Foreign Currency Reserves Hit All Time High at $23 Billion

In a statement released by the State Bank of Pakistan (SBP) on Monday, it is stated that foreign exchange reserves have reached history’s highest point after a weekly increase of 7.8 percent on July 1.

The liquid foreign reserves in possession of the SBP, increased by $1.31 billion to reach $18.13 billion. The SBP foreign reserves stood at $16.82 billion during the previous week. Most of the reserves received by the SBP were through loans and grants. The SBP got $1.34 billion from multilateral, bilateral and some other official sources.

A 7.8% weekly increase brought foreign exchange reserves to $23.09 billion

The IMF pushed $501 million in foreign currency to the SBP while the World Bank sent $502 million and the Asian Development Bank sent $307 million during the past week. The last week also saw SBP make payments worth $50 million on accounts of external debt servicing.

SBP had received $370 million from multilateral, bilateral and other official sources during the past month as well. World Bank sent $107 million in June 2016.

This is the highest value of the foreign exchange reserves ever in Pakistan

Meanwhile, total liquid foreign currency reserves have risen to an all-time high. Net foreign reserves now stand at $23.09 billion. These include other banks except SBP as well. Net reserves in possession of banks other than SBP are $4.96 billion.

Economic experts believe that increasing external debts for increasing foreign exchange reserves instead of increasing exports is a recipe for disaster. This will eventually result in the collapse of national economy. We recently heard that Pakistan has to pay off $50 billion in debts in 2016 and could end up going bankrupt.

With such horrendous predictions getting increasingly probable, the only way for the country to get out of these troubles is by increasing exports and becoming self-sufficient. Once that happens, Pakistan will no longer require loans and be on a prosperous track. Simply increasing forex reserves will hold no long term benefit if it is simply increased by borrowing from international banks.

He is the Editor at ProPakistani.