According to data issued by the State Bank of Pakistan (SBP) on Monday, the amount of foreign currencies held by the central bank climbed by more than $500 million on a weekly basis. The SBP’s foreign exchange holdings were valued at $4.070 billion on June 23. It went up $533 million from $3.537 billion on June 16.
The increase, was brought on by the realisation of $300 million in loan proceeds from the Government of Pakistan (GoP).
The nation’s total liquid international currency holdings, which include net reserves held by institutions other than the SBP. They were $9.341 billion, an increase of $477 million from the previous week. Banks’ net holdings of reserves were $5.271 billion, down $56 million from the previous week. Pakistan’s import cover has also somewhat increased as a result of the rise in reserves at the central bank.
At the beginning of February, Pakistan’s central bank reserves were below $3 billion; however, with the exception of two occasions when they went below $4 billion, the reserves have stayed above that amount (measured by weekend levels).
The International Monetary Fund (IMF) and Pakistan struck a deal at the staff level last week on measures. It will be backed by an approximate $3 billion backup arrangement (SBA). The staff-level agreement must be agreed upon by the IMF Executive Board. This choice is expected to be made by mid-July.
With the SBA in place, Pakistan is anticipated to obtain financial assistance from allies as well as multinational partners. This will increase the reserves in the central bank in the upcoming months.
The significant increase in the reserves of SBP not only bolsters Pakistan’s economic stability but also enhances its standing in the global financial market.
The inflow of funds and support from international institutions such as the IMF will not only aid in addressing economic challenges. But also pave the way for sustainable growth and development.
With the current positive trajectory, Pakistan’s economy is poised to regain strength. And attract further investments, ensuring a brighter future for the nation and its people.
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