The State Bank of Pakistan (SBP) reported a modest increase in its foreign exchange reserves for the week ending November 14, with holdings rising by $27 million to reach $14.551 billion. This growth in reserves reflects ongoing stabilization efforts by the central bank amid macroeconomic challenges and is expected to provide short-term support to the country’s currency and liquidity conditions.
Pakistan’s total liquid foreign reserves, which include SBP holdings and deposits maintained by commercial banks, stood at $19.738 billion during the same period. Of this, commercial banks held $5.186 billion, providing an additional buffer for the domestic financial system and helping banks meet foreign currency demand.
While the SBP’s reserves have improved relative to past years, they remain below historical peaks. Forex holdings are notably higher than the $9.814 billion recorded in FY22, signaling gradual recovery, but still short of the $17.298 billion reported in FY21. Analysts note that this gradual build-up in reserves provides some comfort for Pakistan’s import coverage and external debt obligations, although the country continues to face external financing pressures.
The central bank’s statement comes as Pakistan is preparing for a significant inflow of foreign currency. The International Monetary Fund (IMF) is expected to release $1.2 billion to Pakistan next month, which will further strengthen SBP reserves and improve liquidity in the banking sector. This disbursement is part of Pakistan’s ongoing IMF program and is anticipated to support the country’s balance of payments position while bolstering investor confidence.
Experts say that maintaining adequate forex reserves is critical for Pakistan’s macroeconomic stability. Higher reserves provide a cushion against external shocks, reduce the likelihood of sharp currency depreciation, and help stabilize interest rates in the domestic market. With reserves slowly recovering, the SBP aims to maintain orderly foreign exchange market conditions while supporting economic growth.
The increase also highlights the role of commercial banks in supplementing central bank reserves. With $5.186 billion held by banks, the liquidity position is further strengthened, ensuring that importers, exporters, and investors have access to necessary foreign exchange. This distribution between SBP and commercial banks contributes to market confidence and underlines the resilience of Pakistan’s financial system in navigating short-term external pressures.
Looking ahead, the combination of incremental reserve growth, expected IMF inflows, and continued foreign currency management by SBP is likely to improve the country’s external liquidity situation. Policymakers continue to monitor reserve levels closely, emphasizing the importance of timely external financing and disciplined import management to prevent reserve depletion.
Overall, the latest figures indicate cautious optimism for Pakistan’s external position. While challenges remain, including managing trade deficits and debt obligations, the gradual increase in reserves reflects an ongoing effort by the SBP to stabilize the economy and strengthen market confidence in the national currency.
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