KARACHI: Foreign exchange reserves held by the central bank increased by $30 million to $9.47 billion in the week ending September 6, the State Bank of Pakistan (SBP) said on Thursday.
The country’s foreign exchange reserves rose by $56 million to $14.796 billion. The reserves of commercial banks also increased by $26 million to $5.330 billion.The surge in remittances and exports kept the foreign exchange reserves stable despite external debt repayments.
In July 2024, elevated workers’ remittance inflows and a substantial improvement in export earnings offset an increase in imports and helped contain the current account deficit to $0.2 billion, said the SBP in a monetary policy statement issued on Thursday.
This robust trend in workers’ remittances continued in August as well. The global macroeconomic environment also turned favourable as manifested by the substantial softening of crude oil prices and relative easing of global financial conditions, it said.
“Going forward, import volumes are expected to increase, in line with the ongoing domestic economic recovery. However, the improvement in the country’s terms of trade, mainly driven by softening crude oil prices, is expected to contain the overall trade deficit in FY25,” the SBP said.
Also, export earnings are expected to remain stable as the growth in high value added textiles is expected to compensate for the likely reduction in rice exports,” it added.“The Monetary Policy Committee (MPC) observed that these factors, along with robust workers’ remittances, are expected to keep the current account deficit within the projected range of zero to 1.0 per cent of the GDP in FY25,” it said.“This contained current account deficit, along with the realization of inflows planned under the IMF program, will help further strengthen SBP’s FX reserves.”