SBP reserves up $51m

KARACHI: The State Bank of Pakistan’s (SBP) foreign exchange reserves increased by $51 million to $9.153 billion during the week ending August 2 without disclosing the source of this inflow, central bank data showed on Thursday.

The SBP’s foreign exchange reserves rose for the second straight week after dipping significantly to $9.027bn on July 19 from $9.42bn on July 12.

The SBP reported the country’s total foreign exchange reserves increased to $14.472bn, including $5.318bn held by the commercial banks.

The SBP reserves are considered a measurement of stability in the financial sector. At the end of FY24, they rose to $9.389bn compared to $4.44bn in June FY23. This was a significant change that helped stabilise the exchange rate and gave confidence to foreign investors.

The exchange rate has been stable for the last four months, and foreign investors have found the situation suitable for investment. During this period of stability, the inflows in domestic bonds were highest after the pre-Covid-19 period. The country received $258m in July, while the inflows were $230m in May.

The financial market expects the SBP’s reserves to reach up to $13bn at the end of 2025 with fresh IMF inflows under a new loan programme.

Published in Dawn, August 9th, 2024