SBP forex reserves rise by $27m to $11.25bn

KARACHI: Pakistan’s central bank foreign exchange reserves increased by $27 million to $11.25 billion during the week ended February 28, the State Bank of Pakistan (SBP) said in a statement on Thursday.

However, the total liquid foreign reserves held by the country fell by $52 million to $15.874 billion. The reserves of commercial banks also decreased by $79 million to $4.624 billion. The SBP’s reserves are sufficient to cover over two months of imports.

The SBP’s reserves remain stable due to an increase in remittances and the central bank’s purchases of dollars from the local currency market. However, external debt repayments and a negative current account balance may put pressure on these reserves.

In February, Pakistan’s trade deficit surged by 33 per cent year-on-year, reaching $2.3 billion, which raised concerns about external account pressures. The country also reported a current account deficit of $480 million in January, following three consecutive months of surpluses. Overall, the current account recorded a surplus of $682 million for the first seven months of the fiscal year, compared with a deficit of $1.8 billion during the same period last year.