The State Bank of Pakistan (SBP) continued its active role in the country’s foreign exchange market during May 2025, with net purchases of $522 million. This figure represents an increase of $49 million from April’s total of $473 million, underscoring the central bank’s ongoing strategy to manage liquidity and support stability in the interbank market.
According to official data, SBP’s total intervention since it began publishing figures in June 2024 has now reached $7.75 billion. This intervention is calculated as outright and swap purchases of foreign exchange, minus outright and swap sales conducted with banks through the interbank market. The data highlights the central bank’s steady involvement in managing market flows and smoothing volatility, particularly in the context of Pakistan’s delicate external sector balance.
The uptick in interventions during May comes at a time when Pakistan continues to navigate external financing pressures, fluctuating foreign inflows, and the need to maintain a stable currency against major global peers. For the SBP, these operations provide a tool to balance market demand and supply dynamics while ensuring that sudden volatility does not undermine financial stability.
Market participants note that such interventions are critical to maintaining investor confidence, especially at a time when the domestic economy is closely linked to global commodity prices and shifting monetary policies in key economies. By continuing to monitor and engage in the interbank market, the SBP aims to limit disorderly movements that could otherwise put pressure on reserves and exchange rate stability.
Since data reporting began, the cumulative figure of $7.75 billion reflects a sustained effort by the central bank to manage both liquidity and sentiment. Analysts suggest that this consistent approach highlights the regulator’s commitment to building resilience in the external sector, especially as Pakistan works toward maintaining compliance with international financing commitments and sustaining macroeconomic recovery.
The SBP’s interventions are often viewed in parallel with broader monetary policy decisions. The recent reduction in policy rates, introduced in response to easing inflationary pressures, has also influenced flows in the currency market. While lower rates may temper speculative demand, they also create new dynamics in capital movement that the central bank monitors closely through its intervention strategies.
Observers also highlight that continued transparency in publishing FX intervention data is a positive step toward accountability and improved market communication. By disclosing monthly figures, the SBP allows investors, banks, and policymakers to better understand the scale and intent of its actions, reinforcing trust in the institution’s role as a market stabilizer.
As Pakistan continues to manage its external financing needs, SBP’s foreign exchange interventions are likely to remain a key component of its overall strategy. For the months ahead, analysts will watch closely to see whether rising global uncertainty and local macroeconomic trends necessitate further increases in market operations or allow for a moderation in the pace of intervention.