SBP forex reserves rise to $10.7bn, highest since April 2022

KARACHI: Pakistan’s foreign exchange reserves held by the central bank increased to the highest in 2.5 years as of September 27 due to the receipt of the first tranche of the $7 billion loan from the International Monetary Fund, the State Bank of Pakistan said on Thursday.

The SBP’s reserves surged by $1.168 billion to $10.7 billion, the highest since April 2022.“During the week ended on 27-Sep-2024, SBP reserves increased by $1,168 million to $10,701.7 million. The increase in SBP’s reserves is mainly due to the receipt of $1,026.9 million from the IMF under the EFF programme,” the SBP said in a statement.

The total reserves of the country rose by $1.110 billion to $15.983 billion, the highest level since June 2022. However, the reserves of commercial banks dropped by $58 million to $5.281 billion.

Governor State Bank of Pakistan (SBP) Jameel Ahmad at an event on Wednesday said that the reserves are enough to fund more than two months of imports. The increase in foreign reserves has aided in easily covering import and other obligations, fostering market confidence, he said.

The SBP received $1.03 billion from the IMF as the first tranche of a $7 billion bailout last week. The SBP’s governor emphasized that several positive developments had taken place in the foreign exchange market, noting that the present state of reserves and liquidity was satisfactory and that all outstanding payments, including dividends, had been made.The SBP’s forward book has drastically decreased, remittances and inflows through Roshan Digital Accounts have increased, all of which have strengthened the market’s liquidity position, he claimed, meaning that there is currently no pressure on the FX market.

Analysts were anticipating that as the nation enters the new IMF programme, the foreign exchange reserves will increase, the external account will continue to be fully funded, and there will be less chance of fiscal slippage.