Karachi, May 23, 2024 – The State Bank of Pakistan (SBP) has reported a modest increase in its official foreign exchange reserves, which rose by $22 million over the past week.
As per the latest data released on Thursday, the SBP’s foreign exchange reserves stood at $9.157 billion as of May 17, 2024, up from $9.135 billion on May 10, 2024.
This marginal uptick in the SBP’s reserves comes amidst a broader context of economic challenges and fluctuating financial indicators. The slight increase is seen as a positive signal for the country’s central bank, even as overall net reserves reflect a different trend.
Conversely, the foreign exchange reserves held by Pakistan’s commercial banks experienced a decline during the same period. The reserves dropped by $63 million, falling to $5.428 billion by the week ended May 17, 2024, compared to $5.491 billion on May 10, 2024. This reduction highlights ongoing pressures within the banking sector, possibly due to higher demand for foreign currency or reduced inflows.
As a result of these movements, Pakistan’s total net foreign exchange reserves saw a decrease of $41 million, ending at $14.585 billion as of May 17, 2024. This compares to $14.626 billion a week earlier. The decline in net reserves underscores the balance of payments challenges that the country faces, with the trade deficit and debt repayments continuing to weigh on the overall financial stability.
The mixed movements in the reserves of the SBP and commercial banks underscore the complexities of Pakistan’s economic situation. While the central bank’s slight increase is a step in the right direction, the broader decrease in net reserves and the dip in commercial bank reserves suggest that significant economic hurdles remain.
Economic analysts note that sustaining and growing the central bank’s reserves is crucial for maintaining investor confidence and ensuring the country can meet its international obligations. The SBP’s efforts to manage the currency market and stabilize the economy are ongoing, and these figures will be closely watched in the coming weeks.
The government and financial authorities are expected to continue their efforts to attract foreign investment, secure loans, and enhance export performance to bolster the country’s foreign exchange reserves in the near future.
