Forex reserves rise to $4.31b

According to information issued by the State Bank of Pakistan (SBP) on Thursday, the central bank’s foreign exchange reserves increased by 0.4% week over week to $4.3 billion.

The SBP’s foreign exchange reserves were $4,319.1 million on March 10, 2023, up $18 million from $4,301 million on March 3.

The increase was not explained by the central bank.

The total amount of the country’s liquid foreign exchange reserves, which also includes the net reserves held by banks other than the SBP, was $9,846.8 million. The total amount of net reserves held by banks was $5,527.7 million.

Fahad Rauf, Head of Research at Ismail Iqbal Securities, recently stated that the renewal of the International Monetary Fund’s (IMF) loan programme and the influx of new funding from other multilateral and bilateral creditors were necessary for Pakistan’s foreign currency reserves to increase further.

By the end of the current fiscal year on June 30, 2023, “they (FX reserves) are forecast to climb to roughly $7-8 billion,” he said.

Since the central bank decided to purchase US dollars from the interbank market as a result of a sharp increase in the supply of the dollar relative to demand, the nation’s reserves have continued to rise.

The central bank intervened (bought the surplus) because there were excess US dollars available on the interbank market, according to a source.