SBP forex reserves rise by $46m to $11.72bn

KARACHI: The State Bank of Pakistan’s foreign exchange reserves increased by $46 million to $11.722 billion in the week ending June 13, the central bank said on Thursday.

The country’s total liquid foreign reserves rose by $130 million to $17.005 billion. The reserves of commercial banks increased by $83 million to $5.283 billion. The SBP’s reserves continued to increase due to a current account surplus. Inflows from the International Monetary Fund, rollovers from friendly nations, and the SBP’s dollar buying from the market also played a crucial role in bolstering forex reserves.

Pakistan recorded a current account surplus of $1.8 billion during the 11 months of the fiscal year ending in June, in contrast to a deficit of $1.6 billion in the same period last year. However, the country’s current account turned into a $103 million deficit in May from a $47 million surplus in April, driven by higher imports and a decline in exports. The deficit came at $235 million in May 2024.

The SBP forecasts the current account to remain in surplus for fiscal year 2025. However, due to an uncertain global trade environment and a projected strong demand for imports, the current account is expected to shift to a moderate deficit in fiscal year 2026. Despite weak net financial inflows so far, the SBP anticipates that its foreign exchange reserves will increase to approximately $14 billion by the end of June 2025.

Pakistan on Wednesday signed a $1 billion financing for a five-year multi-tranche facility with the Asian Development Bank (ADB). According to the SBP, the total repayment for FY25 amounted to $25.8 billion, most of which has already been paid or rolled over. The remaining $400 million is set to be settled within the next two weeks, with some inflows anticipated this month. It also expects remittances for FY25 to reach $38 billion, an increase from $31.3 billion in the previous year.