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SBP’s forex reserves climb by $12.5 million in a week


SBP held forex reserves

KARACHI: The State Bank of Pakistan (SBP) saw its foreign exchange reserves rise by $12.5 million, or 0.10 per cent, reaching $12.05 billion for the week ending December 6, according to latest data.

However, the country’s total foreign reserves declined by $19.1 million, or 0.11 per cent, to $16.6 billion during the same period. Forex reserves held by commercial banks also declined $31.6 million, or 0.69 per cent, pushing the total to $4.55 billion.

The central bank’s reserves remain significantly higher, hitting levels last seen in March 2022.

In the previous week, SBP reserves surged by $619.8 million, or 5.43 per cent, following loan disbursements from Asian Development Bank (ADB) under the Climate Change and Disaster Resilience Enhancement Programme.

Since the start of the fiscal year, SBP-held reserves have grown by $2.66 billion, reflecting a 28.34 per cent increase. Over the current calendar year, these reserves have risen by $3.83 billion, up 46.58 per cent.

In other news, Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Jawed Bilwani has called on the SBP to reduce the policy rate by 400 basis points in its upcoming Monetary Policy Committee (MPC) meeting. He pointed out that inflation fell sharply to 4.86 per cent in November.

Bilwani argued that a significant rate cut would bring real interest rates to sustainable levels, making borrowing more affordable for businesses and consumers. He noted that inflation has remained in single digits for four consecutive months, a notable improvement after more than two years of high inflation.

Since June, the SBP has reduced policy rate from 22 per cent to 15 per cent.

Despite this, Bilwani highlighted that Pakistan’s interest rate remains relatively high compared to countries like India (6.5 per cent), Vietnam (4.5 per cent), and Bangladesh (10 per cent).

He emphasised that the elevated rates continue to restrict private sector credit growth and hinder economic activity, putting Pakistan at a competitive disadvantage.

Read next: Pakistan on track for growth through Islamic financing: Finance Minister

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