SBP forex reserves rise by $46m to $11.42bn

KARACHI: Pakistan’s foreign exchange reserves held by the central bank increased by $46 million to $11.418 billion in the week ending January 31, the State Bank of Pakistan reported on Thursday.

However, the country’s forex reserves decreased by $8 million to $16.044 billion and the reserves of commercial banks fell by $54 million to $4.626 billion. The ongoing improvement in the external account, supported by increased remittances and exports, and the SBP’s dollar buying from the currency market supported forex reserves. The current SBP’s reserves are enough to cover over two months of imports.

The SBP purchased $3.8 billion from the interbank market between June and October 2024 to bolster its reserves and manage debt repayments. During the July-December period of FY25, remittances rose to $17.8 billion, representing a 33 per cent increase compared to the same period the previous year.

The SBP indicates that while net financial inflows were limited in the first half of FY25, they are expected to improve moving forward, as a significant portion of official debt repayments has already been made. Therefore, the improved outlook for the current account, along with the anticipated realisation of planned financial inflows, is likely to increase reserves beyond $13 billion by June 2025.

Out of $26.1 billion in Pakistan’s external debt repayments for FY25, the net amount available after rollover/refinance adjustments is $10 billion, with $6.4 billion already paid. For the remainder of FY25, the net repayable amount is $3.6 billion. The SBP expects that inflows from commercial banks and bilateral sources in the second half of this fiscal year will likely offset the outflows.