SBP-held foreign exchange reserves dip marginally

WEB DESK: Pakistan’s foreign exchange reserves, held by the State Bank of Pakistan (SBP), experienced a slight decline of $6.2 million or 0.07 per cent week over week (WoW), settling at $9.1 billion by the week ending June 7, 2024, according to data released by the SBP on Thursday.

The central bank did not specify the exact reason behind this decrease.

Conversely, the country’s overall reserves registered a positive trend, increasing by $168.2 million or 1.18 per cent WoW to reach $14.38 billion. Commercial banks contributed significantly to this rise, as their reserves grew by $174.4 million or 3.42 per cent WoW, reaching $5.28 billion.

The uptick in reserves comes amidst Pakistan’s fiscal activities, notably the recent presentation of the budget for the fiscal year 2024-25. The budget proposes tax hikes aimed at bolstering revenue streams, thereby enhancing prospects for securing a new loan from the International Monetary Fund (IMF).

Currently engaged in negotiations with the IMF, Pakistan anticipates obtaining a larger and longer-term loan, estimated to range between $6 to $8 billion. This effort builds upon previous financial arrangements, including the IMF Stand-By Arrangement (SBA) of approximately $3 billion secured by the end of June last year.

The SBA not only provided critical financial support but also facilitated access to additional multilateral and bilateral funding.

Reflecting on the fiscal year’s progress, SBP-held reserves have surged by $4.64 billion or 103.81 per cent, underscoring significant financial gains.

Moreover, the current calendar year has witnessed a notable increase of $882.1 million or 10.73 per cent in these reserves, highlighting ongoing efforts to stabilize and strengthen Pakistan’s economic foundation.

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