Pakistan’s reliance on short-term borrowing in foreign currency denominations is on a rise since the last three successive months to maintain the country’s foreign currency reserves at an appropriate level, as small-tenure debt touched an eight-month high at $4.87 billion in June. A surge in foreign currency loans, mostly from commercial banks operating in Pakistan, hints that the country’s capacity to make international payments for imports and foreign debt repayments has slightly weakened. The country’s foreign currency reserves stood at $17.82 billion in the week ended July 23, 2021. Almost half of the country’s foreign currency reserves at $17.82 billion currently “are filled by long-term borrowing from international financial institutions, friendly countries and short-term borrowing”. “The net foreign borrowing has remained flat since new borrowing is being made only to repay the previous debt,” an official said the other day.

Source: The Express Tribune August 01, 2021 03:33 UTC