KARACHI: Pakistan’s foreign exchange reserves held by the central bank rose by $22 million to $16.376 billion during the week ending March 19, the State Bank of Pakistan said on Thursday.
The country’s total liquid foreign reserves increased by $32 million to $21.736 billion. The reserves of commercial banks also rose by $10 million to $5.360 billion.
The SBP’s reserves have been increasing, driven by improvements in the current account balance and the central bank’s ongoing dollar purchases in the interbank market.In February, Pakistan recorded a current account surplus of $427 million, thanks to healthy remittances and reduced imports. This surplus compares to $68 million in January of this year and an $85 million deficit in February last year. However, during the first eight months of the current fiscal year, the country recorded a $700 million deficit, contrasting with a $479 million surplus in the same period last year.
However, surging oil prices, driven by the ongoing conflict in the Middle East, raise concerns about inflation in Pakistan and the outlook for its external sector. The country is particularly vulnerable to increases in oil prices, declines in remittances, and fiscal pressures in the Gulf, and it has limited policy options to mitigate these shocks.
The SBP expects that the current account deficit will remain within its previously projected range of 0-1 per cent of GDP for FY26. However, it emphasised the importance of timely realisation of planned official inflows to achieve the targeted buildup of the SBP’s foreign exchange reserves to $18 billion by June this year.
