Karachi, September 26, 2024 – Pakistan’s foreign exchange reserves witnessed an increase of $46 million during the week ending on September 20, 2024, according to data released by the State Bank of Pakistan (SBP) on Thursday. This rise brings the total reserves to $14.873 billion, compared to $14.827 billion recorded a week earlier on September 13, 2024.
The country’s central bank, the SBP, saw its own reserves rise by $24 million, taking the total to $9.534 billion by the end of the week. In comparison, a week earlier, on September 13, the SBP’s reserves stood at $9.51 billion.
Commercial banks also reported a modest increase in their foreign exchange holdings. The reserves held by commercial banks grew by $22 million, reaching $5.339 billion by the end of the week, up from $5.317 billion a week ago.
This latest data reflects gradual improvements in Pakistan’s forex position, which has been under pressure due to external debt repayments and import financing in recent months. However, these pressures are expected to ease in the coming weeks as Pakistan anticipates the release of a $1.1 billion tranche from the International Monetary Fund (IMF), part of a recently approved extended loan program.
On Wednesday, the IMF’s executive board approved a $7 billion Extended Fund Facility (EFF) for Pakistan. The program aims to support the country’s balance of payments and bolster its reserves. The first tranche of $1.1 billion is expected to be disbursed soon, a move that would provide further relief to the country’s reserves and stabilize the financial situation.
The improved reserve position will play a critical role in maintaining stability in the exchange rate, ensuring the smooth facilitation of imports, and addressing external debt obligations. Pakistan has faced considerable challenges in managing its foreign exchange reserves over the past year due to global economic pressures, rising inflation, and domestic economic imbalances.
This increase in reserves, coupled with the anticipated IMF disbursement, provides a positive signal to international markets and investors, reinforcing Pakistan’s ability to meet its external obligations and sustain macroeconomic stability. However, the road to economic recovery remains long, and careful management of both foreign reserves and domestic fiscal policies will be crucial for Pakistan’s financial future.
The IMF’s support will be pivotal in providing the financial cushion needed to navigate this challenging period while setting the stage for long-term economic reforms.
