KARACHI: The State Bank of Pakistan purchased $536 million from the interbank foreign exchange market in December, a significant decrease from $1.151 billion in the previous month, data from the central bank showed on Tuesday.
The SBP conducted strategic foreign exchange interventions totalling $5.52 billion between June and December 2024 to bolster its reserves and manage debt repayments.
“The SBP has been actively buying dollars to build reserves, which grew from $9.39 billion in June to $12.04 billion in November. This likely helped stabilise the rupee, but December’s decline in reserves despite continued buying suggests outflows like debt repayments,” said Saad Hanif, head of research at Ismail Iqbal Securities.
According to the SBP’s data, its reserves fell by $306 million to $11.732 billion in December.During a briefing following the rate cut decision on March 10, SBP Governor Jameel Ahmad informed analysts that repayments for the remaining period of the fiscal year 2025 are expected to total around $3 billion, net of rolled over and refinanced amounts. Planned inflows are anticipated to materialise in the fourth quarter of FY25, with some contingent on a successful review by the International Monetary Fund (IMF).
The SBP’s reserves stand at $11.15 billion as of March 14, sufficient to cover more than two months of imports. During the first eight months of this fiscal year, Pakistan recorded a current account surplus of $691 million. Nevertheless, there was a minor deficit of $12 million in February. Remittances from overseas workers surged by 33 per cent, totalling $24 billion during the July-February period of FY25.
Pakistan is seeking to meet the IMF’s requirements to secure a staff-level agreement as soon as possible. This agreement will unlock the second $1 billion tranche of the $7 billion loan programme secured last year. The IMF completed the first review of the Extended Fund Facility this month.