Central bank forex reserves fall to $11.7bn

KARACHI: Pakistan’s foreign exchange reserves held by the central bank dropped by $15 million to $11.695 billion in the week ending January 3, the State Bank of Pakistan reported on Thursday.

The country’s forex reserves decreased by $31 million to $16.378 billion, and the reserves of commercial banks declined by $16 million to $4.683 billion.The surplus in the current account, along with the improved foreign investment inflows, helped build up the SBP’s FX reserves, despite weak official inflows.

Pakistan’s central bank bought a record $9 billion from the local market last year to stabilise foreign exchange reserves, according to reports that cited State Bank of Pakistan Governor Jameel Ahmad’s briefing before the Senate Standing Committee on Finance.

According to the governor, more than $4.5 billion of the $9 billion was purchased between July and December 2024.Per the SBP’s governor, Pakistan’s external debt remained stable at $100.8 billion as of September 2024. The slight increase in debt was mainly due to revaluation adjustments. He highlighted that the biggest challenge facing the authorities was the balance of payments; however, he assured that the country has sufficient dollars to meet its external obligations.The central bank anticipates that remittances will exceed $35 billion in the current fiscal year, largely due to the shift of grey channel remittances to formal banking channels.