SBP reports notable increase in forex reserves

WEB DESK: In a notable surge, the foreign exchange reserves held by the State Bank of Pakistan (SBP) experienced an increase of $20.6 million, equivalent to 0.29 per cent WoW, reaching $7.04 billion in the week concluding on December 8, 2023.

This encouraging development was unveiled through data released by the central bank on Thursday.

Simultaneously, the overall reserves of the nation witnessed an uptick of $99.3 million, marking 0.82 per cent WoW growth and reaching a total of $12.21 billion.

Commercial banks also contributed to this positive trend, with their reserves climbing by $78.7 million, a 1.55 per cent WoW increase, and reaching $5.17 billion.

In a recent turn of events, Pakistan has received preliminary approval from the International Monetary Fund (IMF) for the disbursement of the next tranche under the ongoing $3 billion loan programme.

Subject to approval by the IMF’s Executive Board, this agreement is set to provide Pakistan access to SDR 528 million, or approximately $700 million.

It’s worth noting that in the final stages of FY23, Pakistan averted a sovereign debt default thanks to a $3 billion standby arrangement (SBA) from the IMF, serving as a crucial last resort.

The initial disbursement of $1.2 billion from the IMF, coupled with $3 billion in bilateral inflows from Arab countries, injected significant strength into the country’s dwindling foreign reserves.

Read more: Interbank closing: PKR gains vs USD

Consequently, in the current fiscal year, the total liquid foreign reserves have marked a noteworthy increase, surging by $3.05 billion, equivalent to 33.26 per cent.

Despite this boost, recent data suggests a slowdown in fresh inflows, with the total reserves experiencing a gradual depletion almost every week.

In parallel, the ongoing calendar year has witnessed a substantial rise of $1.36 billion, reflecting a 12.55 per cent increase in the nation’s foreign reserves.

This economic landscape underscores both the challenges and resilience of Pakistan’s financial outlook.