Foreign exchange reserves to come under pressure in next few months.

ISLAMABAD -- Pakistan's foreign exchange reserves would come under pressure in next few months due to the massive repayment against previous loans and resurgence of current account deficit.

The country has to repay over $7 billion to the different countries and institutions before June this year, which would put pressure on the country's foreign exchange reserves. Meanwhile, resurgence of current account deficit may also pose threat to the external sector. Earlier, the current account was in surplus for few months, which helped in sustaining the foreign exchange reserves of the country. The country's foreign exchange reserves are currently standing at $20.04 billion by February 19. The breakup of $20.04 billion showed that reserves held by the State Bank of Pakistan (SBP) are $12.91 billion and commercial banks have $7.13 billion, according to the latest data of the SBP. The present reserves level provides the import cover of almost around 3 months.

The official documents showed that Pakistan would have to repay around $7 billion in six months (January to June) of the ongoing financial year. The amount included principal as well as interest payment. The documents showed that Pakistan has to repay $10.4 billion to the external sources in entire current fiscal year. Meanwhile, the government had paid only $3.3 billion in first half (July to December) of the year 2020-21. This showed the country had repaid $2.7 billion as principal and $583 million as interest on the outstanding stock of external public debt. During July-December 2020-21, the government settled $1.579 billion worth of foreign commercial loans. Similarly, the government has also repaid $1.431 billion to multilateral and $102 million to bilateral development partners. Considering foreign exchange constraints, financing of development...