It was a rollercoaster ride
Pakistan’s foreign exchange reserves had a rollercoaster year in 2020. They fell below the $10 billion mark during June but returned to a three-year high at $13.4 billion in December 2020.
The country’s depleting dollar reserves were one of the main challenges for the PTI when it came to power in August 2018. Within its first six months, the PTI government saw dollar reserves down to a level that was barely enough to pay for two months of imports.
To tackle this challenge, the government signed a $6 billion bailout with the International Monetary Fund.
The increase in dollar reserves can be attributed to inflows caused by the signing of the IMF programme. It opened more doors for Pakistan as the World Bank, ADB and AIIB pledged their support too.
The programme was supposed to unlock funding of $38 billion from multilateral donors, according to the IMF.