Pakistan's foreign exchange reserves maintain a healthy level: Finance Ministry spokesman

ISLAMABAD: A spokesman for the Ministry of Finance has clarified that Pakistan’s foreign exchange reserves maintain a healthy level, and commercial financing is a normal activity and part of overall financing plan for the current fiscal year.

The spokesman was responding to reports in certain sections of the media that government is taking a $450 million loan to prop up the sliding forex reserves.

“Commercial financing has been planned in terms of budgetary outlay for 2017-18 to bridge resource gap and supplement external buffers,” the spokesman added.

He further said that in absolute terms there has been no increase in external debt liability of the country. In 2013, external debt to GDP ratio was 21.4 percent while in 2017, this ratio has decreased to 20.6 percent showing a net decline of 80 basis points in the external indebtedness of the country.

In fact, the spokesman said that external debt of the country is at a sustainable level and much lower than many comparable economies like India, Sri Lanka, and Egypt.

Similarly, external debt servicing liability for the fiscal year is $5.8 billion as against last year’s liability of $6.44 billion showing a decrease of 10 percent over the previous year.

The spokesman went on to say that Pakistan’s foreign exchange reserves continue to maintain a healthy level stating the increase in reserves is driven by strong improvements achieved in the first quarter of current fiscal year in exports, remittances, Foreign Direct Investment, official and other private inflows.

Furthermore, he said exports have increased by 17.7 pct, remittances by 13.2 pct during July-August 2017 as against corresponding period last year.

FDI during July-August 2017 stood at $458 million as compared to $180 million showing an increase of 154.9 pct compared to corresponding period of last year.

Therefore, the spokesman claimed that with these positive trends strengthening in coming months, the foreign exchange reserves of the country will continue to be at a healthy level.