Karachi, July 18, 2024 – The State Bank of Pakistan (SBP) announced on Thursday that the country’s weekly foreign exchange reserves have increased by $59 million. For the week ended July 12, 2024, the forex reserves rose to $14.704 billion, up from $14.645 billion a week earlier on July 5, 2024.
The central bank reported that its own official reserves increased by $19 million, reaching $9.424 billion as of July 12, compared to $9.405 billion the previous week. Additionally, the foreign exchange reserves held by commercial banks saw a notable rise of $40 million, totaling $5.28 billion, up from $5.24 billion in the same period.
This positive development comes in the wake of Pakistan’s recent staff-level agreement (SLA) with the International Monetary Fund (IMF) for a $7 billion Extended Fund Facility (EFF). The IMF’s executive board still needs to approve the disbursement of the loan.
Financial analysts are optimistic about the impact of the IMF loan on Pakistan’s economic stability. They believe that the release of the funds will not only bolster the country’s foreign exchange reserves but also enhance its balance of payments position.
The anticipated IMF support is expected to bring much-needed relief to Pakistan’s economy, which has been grappling with various fiscal challenges. Strengthening forex reserves is crucial for the country as it seeks to stabilize its currency and ensure sufficient foreign currency availability for international trade and debt repayments.
In recent months, Pakistan has faced significant economic headwinds, including rising inflation and fiscal deficits. The agreement with the IMF is seen as a critical step towards addressing these issues. The EFF program aims to support Pakistan in implementing structural reforms and fiscal policies to restore economic stability and growth.
The increase in forex reserves is a positive indicator for investors and international markets, reflecting improved economic confidence in Pakistan’s financial management. The central bank’s efforts to stabilize the currency and manage foreign exchange reserves are key components of the broader economic strategy aimed at sustainable growth.
Moving forward, the focus will be on the IMF’s executive board meeting, where the approval of the loan disbursement will be a crucial milestone. If approved, the funds are expected to provide a buffer against external economic shocks and support Pakistan’s efforts to achieve macroeconomic stability.
In summary, the rise in weekly forex reserves by $59 million, as reported by the State Bank of Pakistan, marks a positive step for the country’s economy. The pending IMF loan approval holds promise for further strengthening Pakistan’s financial position and paving the way for sustainable economic growth.