Pakistan Sees $168 Million Rise in Foreign Exchange Reserves

Pakistan Sees $168 Million Rise in Foreign Exchange Reserves

Karachi, June 13, 2024 – Pakistan has witnessed increase in foreign exchange reserves by a notable $168 million in the week ending June 7, 2024, according to a statement released by the State Bank of Pakistan (SBP) on Thursday.

This brings the country’s total liquid foreign exchange reserves to $14.384 billion, up from $14.216 billion the previous week, ending on May 31, 2024.

Despite this overall increase, the official reserves held by the SBP experienced a slight decline. The SBP’s reserves fell by $7 million, reaching $9.103 billion by June 7, 2024, compared to $9.11 billion a week earlier. This minor drop in central bank reserves was offset by a significant rise in reserves maintained by commercial banks.

Commercial banks reported a surge of $175 million in their foreign exchange reserves, bringing the total to $5.281 billion by June 7, 2024, up from $5.106 billion the previous week. This increase in commercial bank reserves is largely attributed to the influx of remittances from overseas Pakistanis. The period leading up to Eid-ul-Adha often sees an uptick in remittances, as expatriates send money to their families for the holiday celebrations.

The increase in foreign exchange reserves comes at a crucial time for Pakistan, as the country continues to navigate economic challenges, including managing its current account deficit and external debt obligations. The inflow of remittances has historically been a stable source of foreign exchange for Pakistan, providing much-needed support to the country’s economy.

Eid-ul-Adha, an important Islamic festival, traditionally sees a rise in financial activity as families prepare for the festivities. This year’s remittance boost reflects the ongoing strong ties between overseas Pakistanis and their families back home, contributing positively to the country’s foreign exchange reserves.

The State Bank of Pakistan’s efforts to stabilize the economy and manage foreign exchange reserves remain critical. Monitoring inflows and maintaining reserves is essential for economic stability, especially in light of global economic fluctuations and domestic economic pressures.

As Pakistan moves forward, the role of remittances and effective management of foreign exchange reserves will continue to be pivotal in supporting the nation’s economic resilience and growth.