Foreign exchange reserves held by the State Bank of Pakistan (SBP) rose $1.1 billion, clocking in at $8.8 billion as of September 2, 2022, following receipt of the $1.12-billion loan tranche from the International Monetary Fund (IMF).

Total liquid foreign reserves held by the country stood at $14.5 billion, said the SBP on Thursday. Net foreign reserves held by commercial banks amounted to $5.7 billion.

Alarming level: SBP-held foreign exchange reserves fall $113mn, now stand at $7.7bn

“During the week ended on September 2, 2022, SBP received $1,166 million from IMF under EFF program,” SBP said in a statement. “After accounting for external debt and other payments, SBP reserves increased by $1,103 million to $8,799.9 million.”

The reserves’ position is critical for Pakistan which has been desperately seeking dollar inflows to meet its balance-of-payments needs.

A low level of reserves has caused severe pressure on its currency market with the rupee witnessing its worst monthly performance in July in over 50 years.

Since then, the rupee gained some ground as Pakistan met all prior conditions of the International Monetary Fund (IMF), a development that helped it secure $1.17 billion of inflow under the Extended Fund Facility (EFF). It also required a combination of an improvement in Pakistan’s trade deficit and realisation of export proceeds to halt a slide that saw the rupee close in on the 240 level in the inter-bank market.

The Pakistani rupee closed at 225.42 level on Thursday following a 0.89% fall.