SBP forex reserves rise by $70m to $10.68bn

KARACHI: Pakistan’s central bank’s foreign exchange reserves increased by $70 million to $10.68 billion during the week ended March 28, the State Bank of Pakistan said on Thursday.

The total liquid foreign reserves held by the country also rose by $29 million to $15.58 billion. However, the reserves of commercial banks fell by $41 million to $4.903 billion.The SBP’s reserves stabilised at $11 billion due to improvement in the current account balance bolstered by remittances and dollar purchases from currency markets. However, despite continued dollar buying, the latest decline in reserves shows outflows like external debt repayments.

The SBP purchased $5.523 billion from the interbank market between June and December 2024 to bolster its reserves and meet debt obligations.

During a briefing following the rate cut decision on March 10, SBP Governor Jameel Ahmad informed analysts that repayments for the remaining period of the fiscal year 2025 are expected to total around $3 billion, net of rolled-over and refinanced amounts. He also said planned inflows are anticipated to materialise in the fourth quarter of FY25, with some contingent on a successful review by the International Monetary Fund (IMF).

Last month, Pakistan secured a staff-level agreement (SLA) with the International Monetary Fund for the first review of the ongoing $7 billion loan programme and also obtained a new $1.3 billion arrangement under the Resilience and Sustainability Facility (RSF).

Once the IMF board approves the first review of the Extended Fund Facility (EFF), Pakistan is set to receive $1 billion from the IMF. This approval will also lead to inflows from other multilateral and bilateral lenders. After this disbursement, the total funds received under the EFF facility will reach $2 billion. The board’s approval is expected in May. Additionally, the existing EFF will be supplemented with the RSF, amounting to a total of $1.3 billion, pending the board’s approval.