ISLAMABAD: In the interbank market, the Pakistani rupee fell to a historic low of 183.70 versus the US dollar after the State Bank of Pakistan (SBP) reported a large outflow of USD2.9 billion, as per reports.
The SBP reported that its foreign exchange reserves fell to USD12.047 billion in the week ending March 25 as a result of a large repayment of Chinese loans, with the remainder being ordinary debt servicing. The SBP explained that "this drop reflects repayment of external debt, notably a substantial syndicated lending facility from China." The SBP did not specify the amount to be repaid to Chinese syndicated loans.
However, reports in the media said that the SBP had reimbursed China USD2.4 billion. "The rollover of this syndicated facility is being processed and is expected shortly," the SBP stated, adding that the funds will be returned to the reserves once the rollover is completed.
Foreign Minister Shah Mahmood Qureshi, who is now in China, said his Chinese colleague assured him that Beijing had agreed in principle to offer Pakistan a USD2.4 billion rollover in commercial loans. Despite USD2 billion in IMF and 'sukuk' (Islamic financial certificate) profits, the SBP reserves have been declining since August 2021.
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