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Foreign Reserves: $500m Deposited With State Bank As First Tranche From Qatar

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A good news for the cash-starved PTI government, as Qatar deposited the first tranche of $500 million with the State Bank of Pakistan’s (SBP) foreign currency reserves out of the total $3 billion it pledged to deposit and invest in Islamabad last week.

“$500 million received from Qatar,” the State Bank of Pakistan (SBP) confirmed, according to The Express Tribune.

Qatar announced on Monday that it would invest $3 billion in the form of deposits and direct investments following Qatari Emir Sheikh Tamim bin Hamad Al Thani’s two-day visit to Pakistan on last Sunday.

China, Saudi Arabia and the United Arab Emirates deposited a total of $9.2 billion in cash with the SBP’s foreign currency reserves during the outgoing fiscal year. However, heavy import payments and debt repayments did not let the foreign currency reserves stabilise mainly due to sluggish exports.

The reserves have depleted to six-month low at $7.28 billion in the week ended June 21, 2019, as per SBP latest updates on Thursday. The reserves are just $700 million higher than almost five-year low at $6.63 billion recorded in the week ended on January 18, 2019, according to the central bank.

The consistent drop in the reserves kept mounting pressure on rupee which weakened by almost 32 per cent during the outgoing fiscal year 2019 to Rs160.05 to the US dollar on Friday as compared to its opening rate of Rs121.49 on the first working day of the year on July 3, 2018.

Following the receipt of the first tranche of $500 million from Qatar, the reserves are expected to improve and help the rupee partially recover ground against the greenback next week.

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There is; however, no break-up of the $3 billion Qatari aid available, as to how much of this Doha would provide in cash deposits in soft loan to SBP and how much it would directly invest in various sectors of the Pakistan economy like power and construction.

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Naya Daur