Karachi – The State Bank of Pakistan (SBP) has announced a weekly increase of $12 million in its foreign exchange reserves, bringing the total to $8.05 billion, according to an official statement released on Thursday.
By August 11, the country’s overall liquid foreign reserves had reached $13.379 billion, as communicated officially.
Central Bank Data :
According to data from the central bank, commercial banks held net reserves totaling $5.3237 billion.
The central bank did not explicitly state the reason for the rise in foreign exchange reserves.
These existing reserves are considered adequate to cover imports for more than two months.
Notably, last month witnessed a significant boost in SBP reserves due to financial inflows from the UAE, Saudi Arabia, and the International Monetary Fund (IMF) following the IMF’s approval of a $3 billion Stand-by Arrangement (SBA).
Contrary to market expectations, the SBP decided to maintain the key policy rate at 22% the previous month, rather than increasing it in line with IMF recommendations. SBP Governor Jameel Ahmed revealed this decision after the Monetary Policy Committee (MPC) meeting.
Explaining the decision, Governor Ahmed stated, “Considering the decrease in inflation, the SBP has chosen not to raise the rate.”
During a press briefing, the head of the central bank noted that the projected growth rate for the upcoming year is expected to be between 2% and 3%. He further detailed that the government had completely lifted import restrictions, resulting in a $4.2 billion rise in foreign exchange reserves in July, attributed to funds received from the IMF and other friendly nations.
Governor Ahmed also pointed out that SBP’s foreign exchange reserves now stand at $8.2 billion and are projected to see further improvement by December this year.
The SBP Governor indicated that more loan extensions are expected in the coming months, underscoring the MPC’s anticipation of a decrease in inflation.
In response to persistent inflationary pressures, the SBP has gradually raised its key policy rate by 12.25 percentage points since April 2022.