Karachi, August 1, 2024 – Net foreign exchange reserves of Pakistan saw an increase of $57 million on a weekly basis, the State Bank of Pakistan (SBP) announced on Thursday. By the week ending July 26, 2024, the country’s total foreign exchange reserves had risen to $14.392 billion, compared to $14.335 billion recorded the previous week.
The official reserves held by the State Bank of Pakistan experienced a notable rise, climbing by $75 million to reach $9.102 billion by July 26, 2024. This is an increase from the $9.027 billion reported just a week prior. This positive change reflects the central bank’s efforts to bolster the nation’s financial stability amid ongoing economic challenges.
In contrast, the reserves held by commercial banks dipped slightly. By the end of the week on July 26, 2024, the reserves managed by commercial banks had decreased by $18 million, settling at $5.29 billion. This is a slight drop from the $5.308 billion recorded the previous week.
Despite the increase in SBP’s reserves, Pakistan continues to face significant challenges related to its balance of payments. The country has been grappling with a high current account deficit, which has put pressure on its foreign exchange reserves. However, measures taken to curtail import payments have contributed to reducing the current account deficit, providing some relief.
Economists suggest that while Pakistan’s current measures to stimulate economic growth might lead to a higher import bill, the outlook for Pakistan’s foreign exchange reserves remains optimistic. The anticipated inflows from the International Monetary Fund (IMF) and financial support from friendly countries are expected to provide a substantial boost to the reserves. These expected inflows will be crucial in maintaining the country’s economic stability and supporting its ongoing development initiatives.
The recent rise in SBP’s reserves is seen as a positive sign, reflecting improved financial management and external support. The government’s efforts to negotiate rollovers and secure financial aid from international partners have been pivotal in this regard.
In summary, while commercial bank reserves of Pakistan saw a slight decline, the overall increase in the nation’s foreign exchange reserves is a step in the right direction. The SBP’s reserves have strengthened, providing a cushion against economic uncertainties. Pakistan’s strategic financial maneuvers and expected international support are likely to further stabilize the economic landscape, fostering a more robust economic environment in the coming months.