KARACHI, August 22, 2024 – Pakistan’s foreign exchange reserves experienced a slight uptick, closing at $14.67 billion as of August 16, 2024, according to a report released by the State Bank of Pakistan (SBP) on Thursday. This marks a modest increase of $22 million from the previous week’s reserves, which stood at $14.645 billion on August 9, 2024.
The increase in Pakistan’s reserves is attributed to a combination of factors, including improved export receipts and stronger remittances from overseas Pakistanis, both of which have played a crucial role in bolstering the balance of payments.
Breaking down the figures, the SBP’s own foreign exchange reserves saw a rise of $19 million, bringing the total to $9.292 billion as of August 16, 2024. This is up from $9.273 billion recorded the previous week. Meanwhile, reserves held by commercial banks also experienced a marginal growth of $3 million, ending the week at $5.375 billion compared to $5.372 billion a week earlier.
The slight improvement in the Pakistan’s forex reserves comes at a time when the government is eagerly awaiting significant inflows from the International Monetary Fund (IMF). The expected funds are part of the Extended Fund Facility (EFF), a program aimed at supporting Pakistan’s economic reform agenda and stabilizing its financial position. The anticipated IMF disbursements are expected to further boost the Pakistan’s foreign exchange reserves, providing much-needed support to the economy.
In addition to the IMF inflows, the recent growth in export receipts and remittances has provided a positive outlook for Pakistan’s external sector. The government has been focusing on various initiatives to enhance export competitiveness and encourage remittances through formal channels, both of which have contributed to the slight increase in forex reserves.
However, despite this positive development, challenges remain. The Pakistan’s foreign exchange reserves are still under pressure due to external debt obligations and the need for consistent inflows to maintain stability. The government’s ability to manage these challenges while continuing to attract foreign investment and secure external funding will be crucial in ensuring long-term stability in the Pakistan’s forex reserves.
As Pakistan navigates these economic hurdles, the small but steady increase in its foreign exchange reserves is a positive sign, offering some relief and hope for more substantial growth in the coming months.