Karachi, December 14, 2023 – Pakistan’s foreign exchange reserves witnessed a notable increase of $99 million in the week ending December 8, 2023, signaling a positive development for the country’s economic indicators.
Despite this upward trend, the total reserves of $12.206 billion remain significantly below the peak levels observed in August 2021 when they reached an impressive $27.2 billion.
The recent surge in forex reserves is a positive indication for Pakistan’s economic stability, showcasing incremental growth in its financial strength. The total foreign exchange reserves rose from the previous week’s level of $12.107 billion, demonstrating a modest but welcomed uptick.
However, it is important to note that the current reserves are still far from the robust levels seen in August 2021. The subsequent decline in reserves since that peak period has been a subject of concern and has prompted economic analysts to closely monitor the factors contributing to this trend.
The State Bank of Pakistan (SBP), the country’s central bank, reported an increase of $21 million in its official foreign exchange reserves. The SBP’s reserves reached $7.041 billion by the week ending December 8, 2023, compared to $7.02 billion in the previous week. While this marks a positive trajectory, it underscores the need for sustained efforts to bolster reserves to more substantial levels.
Commercial banks, on the other hand, experienced a more substantial increase in their foreign exchange reserves during the same period. The reserves held by commercial banks recorded a noteworthy uptick of $78 million, reaching $5.165 billion by the week ending December 8, 2023, in contrast to $5.087 billion a week earlier. This surge in commercial bank reserves contributes significantly to the overall increase in the country’s forex holdings.
Despite the positive momentum, the country’s foreign exchange reserves are still in recovery mode. Economic experts emphasize the importance of implementing sound fiscal policies, attracting foreign investments, and maintaining a favorable balance of trade to strengthen the reserves further.
The recent developments indicate a step in the right direction for Pakistan’s economic recovery, but challenges persist. Global economic conditions, trade dynamics, and geopolitical factors continue to influence the trajectory of the country’s foreign exchange reserves. As the government and financial institutions work to address these challenges, sustained efforts are essential to ensure the resilience and growth of Pakistan’s economy in the long term.
While the $99 million increase in Pakistan’s weekly foreign exchange reserves is a positive development, the country remains focused on restoring its reserves to more robust levels. The concerted efforts of both the State Bank of Pakistan and commercial banks contribute to this positive trend, signaling a cautious optimism for the economic outlook.
