SBP reserves climb to $12.08 billion amid growing current account surplus

KARACHI: Pakistan’s foreign exchange reserves held by the central bank increased by $30.7 million, or 0.25 per cent, reaching $12.081 billion in the week ending December 13, according to the State Bank of Pakistan (SBP).

The overall forex reserves in the country rose by $31.8 million to $16.633 billion, while reserves held by commercial banks saw a slight increase of $1 million, totalling $4.551 billion.

The SBP attributed the rise in reserves to a surplus in the current account and higher foreign investment inflows, despite weak official inflows.

In its monetary policy statement, the SBP noted that remittances from overseas workers and export earnings are expected to keep the current account deficit low, within the projected range of 0–1 per cent of GDP for the fiscal year 2025.

It also predicted that the central bank’s reserves would exceed $13.0 billion by June 2025.

Pakistan recorded a current account surplus of $729 million in November, a significant improvement from the $346 million surplus in October and a stark contrast to the $148 million deficit in November 2023.

Over the first five months of FY25, the country’s current account surplus reached $944 million, compared to a $1.67 billion deficit during the same period last year.

The SBP highlighted growing momentum in remittances, with Finance Minister Muhammad Aurangzeb projecting that remittances could hit an all-time high of $35 billion this year, up from $30 billion last year.

This growth is being supported by a narrowing gap between interbank and open market exchange rates, along with favourable government policies.

Although remittances fell by 5 per cent month-on-month, they surged by 29 per cent year-on-year, reaching $2.9 billion in November.

In the five months leading up to November, remittances totalled $14.8 billion, a 34 per cent increase compared to the same period last year. This rise followed government efforts to crack down on the illegal trade of US dollars.

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