The State Bank of Pakistan (SBP) purchased $1.033 billion from the interbank foreign exchange market in October 2025, maintaining its active intervention stance from September, when it had acquired $1.023 billion. This continued intervention reflects the central bank’s commitment to managing liquidity in the foreign exchange market and supporting the stability of the Pakistani rupee amid ongoing economic and external pressures.
According to data released by the SBP, total foreign exchange purchases during the first four months of fiscal year 2026, covering July through October 2025, amounted to $2.5 billion. This figure is significantly lower than the $3.26 billion recorded during the same period in FY25, indicating a more measured approach to market intervention. Analysts note that the reduction in cumulative purchases does not signal a withdrawal from market support but reflects a calibrated strategy to maintain currency stability while managing reserves efficiently.
Data since June 2024 shows that the SBP has made net purchases totaling $10.76 billion over a 16-month period. These net purchases include outright and swap transactions, demonstrating the central bank’s sustained efforts to intervene in the interbank market in order to curb excessive volatility in the exchange rate. By maintaining this level of activity, the SBP seeks to ensure an orderly market environment, which is crucial for businesses, importers, exporters, and foreign investors who rely on predictable foreign exchange conditions for their operations.
The SBP defines net foreign exchange intervention as the total of outright and swap purchases of foreign currency minus outright and swap sales conducted with banks in the interbank market. These interventions are an essential tool for the central bank to manage liquidity, influence market expectations, and provide stability during periods of currency fluctuations. They help prevent sharp movements in the exchange rate that could adversely affect inflation, import costs, and investor confidence.
Despite lower cumulative purchases in FY26 compared to FY25, the continued presence of the SBP in the market underlines its commitment to maintaining the rupee’s stability. Analysts note that the central bank’s interventions are closely aligned with broader economic objectives, including controlling inflation, safeguarding foreign reserves, and supporting overall financial stability. By providing a consistent buffer in the foreign exchange market, the SBP ensures that market participants have confidence in the currency, which is essential for sustaining investment flows and trade activities.
The October purchase also reflects the SBP’s broader strategy to respond to external pressures and manage foreign exchange demand efficiently. By actively participating in the interbank market, the central bank helps prevent disorderly currency movements, supports the domestic financial system, and signals its readiness to intervene when necessary. These measures are part of ongoing efforts to maintain investor confidence and ensure a stable macroeconomic environment in Pakistan.
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