KARACHI: Pakistan’s foreign exchange reserves held by the central bank increased by only $6 million to $16.381 billion during the week ending March 27, the State Bank of Pakistan (SBP) said on Thursday.
The country’s total liquid foreign reserves rose by $53 million to $21.789 billion. The reserves of commercial banks also increased by $47 million to $5.407 billion.
Forex reserves have increased due to the improved current account balance and the central bank’s ongoing dollar purchases in the interbank market. The SBP bought $6.9 billion from the interbank market last year, with purchases reaching $1.024 billion in December alone.
Last week, the International Monetary Fund (IMF) reached a staff-level agreement with Pakistan on the country’s loan programme, which is a crucial step toward unlocking $1.2 billion in funding. This agreement, pending approval from the IMF board, will grant Pakistan access to $1 billion through the Extended Fund Facility and $210 million from the Resilience and Sustainability Facility. If approved, this would bring the total disbursements under the ongoing programme to $4.5 billion.
Pakistan sees its near-term economic outlook as remaining cautiously optimistic despite emerging geopolitical risks. On the external front, high remittance inflows are expected, particularly an increase in transfers associated with the Eid festival. However, their trajectory will depend on economic conditions in the host countries, according to the monthly economic update and outlook for March issued by the finance ministry this week.
“Encouraging trends in IT exports are also providing additional support to foreign exchange earnings,” the report said. “The current account deficit is likely to remain manageable, while rising oil prices pose a risk to the import bill,” it added.
“Notwithstanding the downside risks amid global uncertainties, the latest indicators suggest that the economy is better positioned to absorb external shocks and maintain overall resilience in the coming months.”
