As Pakistan serviced its commitments to foreign creditors in the midst of a severe economic crisis, the State Bank of Pakistan's (SBP) foreign exchange reserves continued to decline.

The central bank's foreign exchange reserves dropped by $245 million to $5.57 billion during the week that ended on December 30, 2022, according to a statement released on Thursday. This is a decrease from the reserves of $5.821 billion the previous week.

According to the announcement, commercial banks currently have $5.84 billion in net foreign reserves, bringing the overall amount of reserves to $11.42 billion.

As the nation strives to reduce imports amid a dollar shortage, the reserves, which fell to their lowest level since April 2014, would now only provide import cover worth 1.06 months.

This week, the National Security Committee (NSC) decided to take proactive measures to strengthen the economy, including rationalising imports and stopping hawala and illegal money outflows.

Pakistan will have to pay back roughly $8.3 billion in the form of external debt payments over the upcoming three months (Jan.-March) of the current fiscal year while dealing with a crisis-like situation.

The administration hopes to pass the IMF's ninth review in order to obtain a $1.7 billion bailout package, although neither side has made any significant progress recently.

In this regard, the country would uphold its international duties and avoid default, according to Senator Ishaq Dar, Minister of Finance and Revenue.

Dar also predicted that Saudi Arabia and China would increase their deposits in Pakistan "within a matter of days" and insisted that the country's foreign exchange reserves would progressively increase throughout the current fiscal year.

The government hopes to raise money from the International Conference on Climate Resilient Pakistan since catastrophic floods devastated the country and cost $30 billion in damages despite Pakistan being one of the countries with the lowest carbon emissions.