SBP buys $5.7bn from market in eight months

KARACHI: Pakistan’s central bank purchased $5.677 billion from the interbank market between June 2024 and January 2025 to boost its foreign exchange reserves and meet external debt repayments, according to the latest data from the State Bank of Pakistan (SBP).

In January, the SBP bought $154 million worth of foreign currency from the market, down from $536 million in the previous month.Analysts said the favourable current account position allowed the SBP to make forex interventions in the market.

“These dollar purchases were directed by the central bank to bolster foreign exchange reserves and fulfil external obligations,” said Awais Ashraf, director of research at AKD Securities Limited.

In March, Pakistan had a record current account surplus of $1.2 billion, attributed to a significant increase in remittances. The country reported a current account surplus of $1.9 billion during the first nine months of the fiscal year 2025, compared with a deficit of $1.7 billion for the same period last year.

In terms of debt repayments, the SBP estimates that the total amount payable for FY25 is $26 billion, of which $16 billion is expected to be rolled over or refinanced. Net repayable debt stands at $10 billion, with $8 billion already paid.

During meetings with global financial and investment institutions at the IMF-World Bank Spring Meetings in Washington last week, SBP Governor Jameel Ahmad said that the central bank has successfully built foreign exchange (FX) buffers through FX purchases, supported by a surplus in the external current account.