SBP forex reserves increase by $18m to $11.17bn

KARACHI: Pakistan’s foreign exchange reserves held by the central bank rose by $18 million to $11.175 billion in the week ending November 1, the State Bank of Pakistan (SBP) said on Thursday.

However, the country’s forex reserves dropped by $117 million to $15.93 billion. The reserves of commercial banks also decreased by $135 million to $4.757 billion.

State Bank of Pakistan (SBP) Governor Jameel Ahmad said in an analyst briefing following the monetary policy meeting on Monday that the positive trend in the country’s external sector will continue, with remittances for October estimated to exceed $3 billion. This development is anticipated to further reduce the current account deficit in the July-October period.

According to the SBP, debt repayments for FY25 total $26.1 billion, slightly down from the previous estimate of $26.2 billion due to interest expense adjustments. Over the next eight months, the government has to repay $6.3 billion; the remainder will likely be rolled over or refinanced.

Pakistan is expected to receive $500 million in loans from the Asian Development Bank (ADB) in the coming weeks, which will help boost the country’s foreign exchange reserves to $11.7 billion. The reserves are expected to reach $13 billion by June 2025. In September 2024, the current account reported a surplus for the second consecutive month, bringing the first quarter of FY25’s cumulative deficit down to $98 million.

Strong worker remittances and increased exports have helped keep the deficit under control despite a sharp rise in imports.The SBP’s reserves also increased as a result of receiving the first tranche of the International Monetary Fund (IMF) loan programme. Furthermore, the SBP purchased $1.3 billion from the interbank forex market in June and July to bolster reserves and repay external debt.