KARACHI: Pakistan’s foreign exchange reserves held by the central bank increased by $87 million to $16.3 billion during the week ending February 27, the State Bank of Pakistan said on Thursday.
The country’s total liquid foreign reserves rose by $26 million to $21.434 billion. However, the reserves of commercial banks dropped by $61 million to $5.134 billion.The improvement in Pakistan’s external account position, supported by strong remittances and the central bank’s dollar purchases from the FX market, helped the SBP build its reserves.
In a briefing to the Senate Standing Committee on Finance, SBP Governor Jameel Ahmad said that despite ongoing regional conflicts and global economic uncertainties, the country is projected to achieve economic growth of 3.75-4.75 per cent while maintaining inflation within a range of 5-7 per cent for the current fiscal year.
He noted that Pakistan’s external debt and liabilities have increased to $138 billion, which includes $103 billion in public external debt. Additionally, he acknowledged a 7.0 per cent decline in exports.
The central bank governor revealed that the SBP purchased $24 billion from the market over the last three years. This action helped stabilise the exchange rate and strengthen external buffers and he emphasised that these reserves were not built through additional external borrowing. He cautioned that if the Middle East conflict continues for an extended period, international oil prices could rise to approximately $100 per barrel. Nevertheless, he assured that the current account deficit would remain contained at 0-1 per cent of GDP, even with higher oil prices. He also mentioned that workers’ remittances are expected to reach $42 billion this fiscal year, which will provide ongoing support for the external account.
