Karachi, September 12, 2024 – Pakistan’s foreign exchange reserves recorded a modest increase of $56 million, bringing the total to $14.796 billion by the week ending on September 6, 2024.
This data, released by the State Bank of Pakistan (SBP) on Thursday, shows an improvement from the previous week’s total of $14.74 billion, reported on August 30, 2024.
Breaking down the figures, the SBP’s own reserves grew by $30 million, reaching $9.467 billion by September 6, 2024, up from $9.437 billion a week earlier. Additionally, foreign exchange reserves held by commercial banks increased by $26 million, rising from $5.303 billion the previous week to $5.329 billion.
Market analysts attributed this slight rise in reserves to increased remittances from Pakistani expatriates and higher export receipts. These inflows helped provide some much-needed relief to Pakistan’s external accounts, which have been under considerable pressure due to a low level of foreign reserves.
Despite this improvement, Pakistan continues to face significant external challenges. The country is grappling with a balance of payment crisis, largely driven by debt repayments and a need for fresh foreign inflows. Analysts remain cautious about the sustainability of the current rise in reserves, emphasizing that the long-term outlook depends on securing consistent funding from external sources.
One of the primary focuses for Pakistan’s financial authorities is securing the $7 billion Extended Fund Facility (EFF) from the International Monetary Fund (IMF). Pakistan’s government has been in negotiations with the IMF to unlock further tranches of this package, which are critical for stabilizing the country’s economy and meeting its external obligations.
Market experts believe that the IMF’s disbursement, along with rollovers from friendly countries such as Saudi Arabia, China, and the UAE, will be instrumental in supporting Pakistan’s efforts to address its ongoing balance of payment challenges. These inflows are seen as a key factor in preventing a deeper crisis and ensuring that Pakistan can maintain its foreign exchange reserves at a stable level.
While the recent increase in reserves is a positive sign, Pakistan still faces substantial economic hurdles. Maintaining upward momentum will require concerted efforts by the government, including continuing reforms and securing further external funding. Without such measures, Pakistan risks facing further external pressure in the coming months.
