The foreign exchange reserves held by the State Bank of Pakistan (SBP) have reached their highest level since July 2023, following a weekly increase of $33 million, according to data released by the central bank on Thursday. As of August 30, 2024, SBP’s reserves stood at $9.437 billion, reflecting an increase from $9.403 billion on August 23.
This growth, while modest, marks a significant milestone as Pakistan continues to rebuild its foreign currency reserves amidst economic challenges, including inflationary pressures and external debt obligations. The rise in reserves signals a step towards economic stabilization, though the country’s foreign reserves are still subject to fluctuations due to ongoing global economic uncertainties.
Despite the increase in SBP reserves, the country’s overall liquid foreign currency reserves— which include the net reserves held by banks other than the SBP—declined by $36 million, bringing the total to $14.740 billion. Commercial banks saw a net decrease in reserves, which stood at $5.303 billion, reflecting a weekly decline of $70 million.
This increase in reserves comes as Pakistan continues to implement economic reforms, particularly in foreign exchange management, to boost investor confidence and stabilize the local currency. The rise in reserves is crucial for Pakistan’s economic recovery as it strengthens the country’s ability to manage imports and service foreign debt.
The SBP’s efforts to maintain and grow its foreign exchange reserves will play a vital role in ensuring macroeconomic stability in the coming months, especially as Pakistan navigates through external financial pressures.