SBP forex reserves rise by $18m to $11.04bn

KARACHI: Pakistan’s foreign exchange reserves held by the central bank increased by $18 million to $11.041 billion in the week ending October 18, the State Bank of Pakistan said on Thursday.

However, the country’s forex reserves fell by $94 million to $16.017 billion. Similarly, the reserves of commercial banks dropped by $112 million to $4.976 billion.The SBP’s reserves continued to improve due to the reduction in the current account deficit. Furthermore, the first tranche of $1.03 billion from the International Monetary Fund (IMF) under the $7 billion Extended Fund Facility programme supported the forex reserves.

Pakistan’s current account recorded a surplus of $119 million in September. This marks the second consecutive monthly surplus following a surplus of $29 million in August and a deficit of $218 million in September 2023.During the first quarter of FY2025, the country’s current account deficit decreased to $98 million, down 92 per cent from a year earlier.

The quality of reserves improved, with a reduction in the SBP’s forward and swap liabilities. Major factors included improved financial inflows and narrowing of the current account deficit provided the SBP room to build external buffers, the SBP said in its annual report for the fiscal year 2023-24 on the state of the economy. “Moreover, the amortization of FX loans was also lower in FY24. As a result, the reserve adequacy improved to 1.6 months of next year’s imports of goods and services,” it said.