The State Bank of Pakistan’s (SBP) foreign exchange reserves saw an increase of $70 million during the past week, reaching $10.68 billion as of March 28, according to data released on Thursday. However, the central bank did not specify the reason behind this rise.
With this change, the country’s total liquid foreign reserves now stand at $15.58 billion. Out of this, commercial banks hold $4.90 billion in net foreign reserves.
Despite the recent increase in SBP-held reserves, Pakistan’s overall foreign exchange position remains under pressure due to external debt obligations and economic challenges.
Last week, the country’s foreign exchange reserves had dropped to a six-month low, also standing at $15.58 billion, largely due to scheduled debt repayments. Pakistan has been managing its external financing needs through a combination of multilateral and bilateral inflows, as well as loan rollovers from friendly nations.
However, sustaining a comfortable level of reserves remains a challenge given the country’s high import bill and upcoming debt repayments.
Going forward, the country’s foreign exchange reserves will depend on factors such as remittances, exports, foreign direct investment, and loan disbursements from international lenders.
The latest rise in reserves provides some relief but does not significantly alter Pakistan’s external position. The government continues to seek additional inflows to ensure reserve stability and meet its foreign payment obligations.
Analysts suggest that maintaining adequate reserves is crucial for currency stability and investor confidence, particularly as Pakistan engages in negotiations for future financial assistance.
