KARACHI: The central bank bought $154 million from the interbank market in May, the lowest monthly purchase since January 2025, according to State Bank of Pakistan data. The SBP purchased $635 million from the market in April. It bought $7.3 billion in the 11 months of fiscal year 2026, up slightly from $7.2 billion in the same period a year earlier.
Awais Ashraf, director of research at AKD Securities, said the decline in SBP purchases in May is driven by increased demand for dollars in the open market from people travelling to Saudi Arabia for Hajj. The resulting tighter dollar availability prompted the central bank to scale back its purchases to avoid putting pressure on the rupee, he said. The SBP typically buys excess dollars from the market to build forex reserves and meet external debt-servicing needs.
The SBP’s foreign exchange reserves stood at $17.2 billion by the end of May. Higher remittances and a narrow current account deficit have helped bolster FX reserves, while the SBP continued to build its buffers through foreign exchange market interventions. The SBP’s reserves are expected to exceed $21 billion this fiscal year.
The current account deficit decreased to $328 million in July, falling 60 per cent from the previous month and 38 per cent from a year earlier. The central bank projects the current account deficit to remain within 0-1 per cent of GDP in FY27. Remittances from Pakistanis working abroad exceeded $41 billion in FY26 and are expected to reach $44 billion in FY27.
“External sector developments are expected to remain broadly supportive, underpinned by improved exports, particularly textiles, sustained remittance inflows and continued export facilitation measures,” said the finance ministry in its latest monthly economic outlook and update. “These trends should help contain pressures on the balance of payments and support reserve adequacy,” it added.
