SBP forex reserves increase by $31m to $12.08bn

By Our Correspondent
December 20, 2024
A foreign currency dealer counts US dollar notes at a currency market in Karachi on July 19, 2022. — AFP
A foreign currency dealer counts US dollar notes at a currency market in Karachi on July 19, 2022. — AFP

KARACHI: Pakistan’s foreign exchange reserves held by the central bank rose by $31 million to $12.081 billion in the week ending December 13, the State Bank of Pakistan said on Thursday.

The country’s forex reserves increased by $32 million to $16.633 billion. The reserves of commercial banks rose by $1 million to $4.551 billion. The surplus in the current account, along with the improved foreign investment inflows, helped build up SBP’s FX reserves, despite weak official inflows, the SBP said in a monetary policy statement on Monday.

“Going forward, the sustained uptrend in workers’ remittances and exports, along with favourable international commodity prices, are expected to keep the current account deficit near the lower bound of the projected 0–1 percent of GDP range in FY25,” it said.

“This will enable the SBP’s FX reserves to exceed $13.0 billion by June 2025,” it added.Pakistan posted a current account surplus of $729 million in November. This compares to a surplus of $346 million in the previous month and a deficit of $148 million in November 2023. Over the first five months of the fiscal year 2025, Pakistan posted a current account surplus of $944 million, in contrast to a deficit of $1.67 billion during the same period last year.

The SBP said that there is an increasing momentum in remittances. Finance Minister Muhammad Aurangzeb anticipates that remittances will reach an all-time high of $35 billion this year, up from $30 billion last year. This growth is supported by a narrowing gap between interbank and open market exchange rates, as well as favourable policies.

Remittances saw a 5.0 per cent decline MoM but increased by 29 per cent year-on-year, reaching $2.9 billion in November. The cash sent home by Pakistani citizens working abroad rose by 34 per cent, totalling $14.8 billion in the five months leading up to November compared with the same period last year. This improvement follows the country’s crackdown on unofficial buying and selling of dollars.