Karachi, September 5, 2024 – The State Bank of Pakistan (SBP) reported an increase of $34 million in its foreign exchange reserves for the week ending August 30, 2024.
According to the SBP, reserves rose to $9.437 billion, up from $9.403 billion recorded on August 23, 2024. This marks a modest yet positive uptick in Pakistan’s foreign currency holdings amidst challenging economic conditions.
Despite the increase in SBP reserves, the foreign exchange reserves held by the country’s commercial banks showed a decline. The commercial bank reserves fell by $70 million to $5.303 billion by the week ended August 30, 2024, compared to $5.373 billion in the previous week, according to the SBP. This drop underscores the fluctuating foreign exchange situation in the country, as commercial banks deal with external payments and internal liquidity challenges.
The SBP said overall, Pakistan’s net foreign exchange reserves decreased by $36 million, standing at $14.74 billion as of August 30, 2024. This decline reflects the broader economic pressure on the country’s external account. With foreign reserves remaining under pressure, there is increasing reliance on external financing and assistance from international institutions.
Pakistan continues to actively pursue the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) program, which is expected to provide a much-needed boost to the economy. Under this program, the IMF is anticipated to release $7 billion to Pakistan, which could help stabilize the country’s foreign exchange reserves and provide fiscal breathing space. Authorities remain optimistic that this disbursement will be finalized soon, easing financial strains and boosting investor confidence.
The economic situation in Pakistan remains delicate, with rising inflation, current account deficits, and fluctuating foreign exchange reserves. However, the anticipated IMF disbursement could be a significant step toward stabilizing the economy, ensuring Pakistan can meet its external obligations, and restoring macroeconomic stability. The next few weeks will be critical as Pakistan awaits the IMF’s decision and takes further measures to strengthen its economic fundamentals.
