SBP reserves increase by $33m to $9.44bn

KARACHI: Pakistan’s foreign exchange reserves held by the central bank rose by $33 million to $9.44 billion in the week ending August 30, the State Bank of Pakistan said on Thursday.

However, the country’s foreign exchange reserves fell by $36 million to $14.74 billion. The reserves of commercial banks also decreased by $70 million to $5.303 billion.The drop in the current account deficit due to increased remittances and exports contributed to the rise in the forex reserves.

The current account deficit has substantially decreased right at the beginning of the fiscal year 2025. The deficit fell to $162 million, marking a 78 per cent decrease from the previous year and a 48 per cent decrease from the previous month.

The reduction in the deficit is largely attributed to a 48 per cent year-on-year increase in remittances. This significant reduction has contributed to the stability of the Pakistani rupee against the US dollar. The SBP’s have seen a substantial increase. The SBP reserves have risen to $9.4 billion, up from $7.6 billion a year earlier.

The improvement in forex reserves helped allow overseas investors to repatriate their profits and dividends to home countries.

The repatriation of profits and dividends from foreign investments in Pakistan significantly increased to $139 million in the first month of the current fiscal year, compared with $2.2 million in the same period last year. Pakistan is working to secure final approval from the executive board of the International Monetary Fund for a new $7 billion loan programme. This approval is delaying due to the pending confirmation of debt rollovers and bridging the country’s external financing gap.