Karachi, May 13 (IANS): Pakistans foreign exchange reserves dropped to their lowest level since December 2019 at $16.4 billion in the week that ended May 6, from $16.5 billion a week earlier owing to increasing current account and trade deficits, higher external debt payments and dried dollar inflows.

The country's reserves declined by $178 million or 1.1 per cent on a week-on-week basis to stand at $16.376 billion, The News reported citing central bank data.

The central bank reserves also fell to a 23-month low.

The delay in the revival of the International Monetary Fund bailout along with lack of pledges of funding from friendly countries is adding pressure to the foreign reserves and the local unit.

Samiullah Tariq, the head of research at Pakistan-Kuwait Investment Company, said decline in reserves is nominal.

"However, in terms of imports cover we are lower than three months, and we have to go into the IMF program to stabilise the reserves."

Prime Minister Shehbaz Sharif, who took office last month after ousting Imran Khan, faces a battle to secure the revival of the IMF bailout as it's a prerequisite for further financial assistance from other bilateral and multilateral creditors, The News reported.

The country needs quick foreign currency inflows to meet import and debt payments amid falling foreign exchange reserves.

However, the present government will have to cut costly energy subsidies, which were introduced by the former government.

It requires increasing petroleum and electricity prices to get the nod from the IMF for the release of the next loan tranche.

Sharif visited Saudi Arabia and the United Arab Emirates last week but didn't manage to obtain pledges of immediate financing.

A rollover of $2.3 billion Chinese commercial loans has also not been materialised yet.