The State Bank of Pakistan (SBP) has actively engaged in the interbank foreign exchange market, purchasing USD 1,023 million in September 2025. This represents a significant increase from the USD 257 million acquired in August 2025, demonstrating the central bank’s renewed efforts to provide liquidity and stabilize the domestic currency amid evolving economic conditions.
According to the SBP, total foreign exchange purchases during the ongoing fiscal year FY26 have reached USD 1.469 billion. While this figure indicates continued intervention, it is notably lower than the USD 2.237 billion recorded during the corresponding period of FY25. Analysts suggest that the reduction in purchases could reflect improved market stability and a more calibrated approach by the SBP to manage Pakistan’s foreign exchange reserves.
Data published since June 2024 shows that the SBP has made net purchases of USD 9.726 billion from the interbank market, highlighting the central bank’s consistent role in ensuring sufficient dollar liquidity. Net FX Intervention, as defined by the SBP, includes outright and swap purchases of foreign exchange minus outright and swap sales conducted with banks in the interbank market. This approach allows the central bank to actively manage currency flows while addressing short-term fluctuations in supply and demand.
The increase in September’s forex purchases comes amid a period of heightened market activity, with businesses and financial institutions requiring stable access to foreign currency for trade, imports, and debt servicing. By stepping into the market with substantial dollar purchases, the SBP helps mitigate volatility, ensuring smoother functioning of the domestic financial system. This intervention also reassures investors and traders, reinforcing confidence in Pakistan’s currency management policies.
Despite these interventions, the pace of purchases in FY26 remains below last year’s levels. Experts note that Pakistan’s economy has shown signs of adjustment, with foreign inflows, exports, and remittances contributing to a more balanced foreign exchange environment. As a result, the central bank appears to be adopting a measured approach, intervening when necessary while allowing market forces to play a greater role in determining exchange rates.
Over the past year, the SBP’s consistent participation in the interbank market has become a key tool for managing the PKR-USD exchange rate. Through a combination of outright and swap transactions, the central bank can provide short-term liquidity support to commercial banks and financial institutions, preventing excessive fluctuations in the currency market.
Looking ahead, continued monitoring of market dynamics will remain critical. The SBP’s strategy of selective intervention, coupled with broader economic policies, aims to maintain foreign exchange stability while supporting Pakistan’s macroeconomic objectives. By purchasing USD 1.023 billion in September, the SBP has signaled its readiness to act decisively, ensuring that liquidity needs are met and that the interbank market operates efficiently.
Overall, the September intervention underscores the central bank’s commitment to stabilizing the foreign exchange market, balancing supply and demand pressures, and supporting broader financial stability in Pakistan. Through targeted purchases and careful management of net FX intervention, the SBP continues to play a pivotal role in maintaining confidence in the domestic currency.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.