KARACHI – Pakistan’s foreign exchange reserves witnessed a robust increase of $1.545 billion for the week ending January 25, 2019, primarily propelled by substantial inflows from Saudi Arabia and the United Arab Emirates (UAE), as reported by the State Bank of Pakistan (SBP) on Thursday.
The country’s foreign exchange reserves surged to $14.802 billion, reflecting a remarkable upswing from the previous week’s figure of $13.257 billion. The official reserves of the SBP, responsible for managing the country’s monetary policy, recorded an impressive increase of $1.518 billion, rising from $6.636 billion in the previous week to $8.154 billion.
The SBP elucidated that during the week under review, concluding on January 25, 2019, it received inflows of $1,000 million from both Saudi Arabia and the UAE as part of funds placement. The significant financial support from these Gulf nations played a pivotal role in bolstering Pakistan’s foreign exchange reserves, providing a much-needed boost to the country’s economic outlook.
Upon accounting for outflows related to external debt and other official payments, the SBP’s net reserves increased by $1.518 billion during the week. This positive net change signifies a strengthening of Pakistan’s financial position, reducing vulnerabilities and enhancing the resilience of the country’s monetary system.
In addition to the surge in the SBP’s reserves, commercial banks also experienced an uptick in their holdings. The reserves held by commercial banks increased by $27 million, reaching $6.648 billion compared to the previous week’s figure of $6.621 billion. This augmentation suggests a broader positive impact on the financial sector, contributing to overall economic stability.
The injection of funds from Saudi Arabia and the UAE is particularly noteworthy, as it aligns with the ongoing efforts of the Pakistani government to secure financial assistance from friendly nations. These inflows not only serve as a testament to the diplomatic and economic ties between Pakistan and the Gulf nations but also play a crucial role in mitigating the country’s external financing challenges.
Experts believe that this boost in foreign exchange reserves provides Pakistan with greater flexibility to meet its international payment obligations, enhance investor confidence, and stabilize the local currency. The positive impact on both central bank and commercial bank reserves underscores the collaborative efforts between the public and private sectors in fortifying the country’s economic foundation.
As Pakistan’s foreign exchange reserves reach new heights, the country is poised to navigate global economic uncertainties with increased resilience. The government’s proactive measures to secure financial support, coupled with international cooperation, are anticipated to contribute to sustained economic growth in the coming months. Market observers and policymakers alike will be closely monitoring the evolving economic landscape for further developments.
