KARACHI: The liquid foreign exchange reserves of the country increased to $20.512 billion by year-end 2020, State Bank of Pakistan (SBP) said on Thursday.

The foreign exchange reserves of the country increased by $258 million to $20.512 billion by week ended December 31, 2020 as compared with $20.254 billion by week ended December 24, 2020.

The official reserves of the central bank increased by $261 million to $13.412 billion by week ended December 31, 2020 as compared with $13.151 billion a week ago.

The foreign exchange reserves held by commercial banks were flat at $7.1 billion by week ended December 31, 2020 as compared with $7.103 billion by week ended December 24, 2020.

The increase in foreign exchange reserves reflected an improvement in the country’s external position at the end of 2020. Higher reserves provided greater support for meeting external payment obligations and strengthened confidence in the overall financial position.

The State Bank of Pakistan’s reserves remained the largest component of the country’s total holdings, while commercial banks continued to maintain a substantial level of foreign currency assets. The rise in reserves also offered some cushion against external shocks and helped improve the country’s capacity to manage international payments.

Market analysts closely monitor reserve levels as an important indicator of external sector stability.