Pakistan’s State Bank of Pakistan (SBP) foreign exchange reserves increased by $33 million, hitting a 26-month high of $9.43 billion for the week concluding August 30, 2024, as per the central bank’s most recent release.
The continuous increase in reserves over the last six weeks has boosted the native currency, which rose by Rs0.10 to Rs278.67 versus the US dollar in the interbank market, reversing a recent decline.
The rupee had earlier fallen to a five-month lowest of Rs278.77 on Wednesday.
The SBP’s reserves have climbed by $409.6 million in the previous six weeks, reaching to levels last seen in July 2022.
Officials from the central bank previously said they were buying US dollars from the local market to enhance reserves, though they haven’t given particular explanations for the rise.
Strong remittance inflows from employees and rising export revenue have bolstered the central bank’s policy by maintaining the supply of US dollars above the demand for imports.
According to SBP predictions, reserves may increase to $13 billion by June 2025, the end of the current fiscal year.
Conversely, commercial banks’ foreign currency reserves dropped by $69.8 million to $5.30 billion.
As a result, the nation’s overall reserves decreased by $36.4 million, from a 26-month high of $14.77 billion the week prior to the week ending August 30, to $14.73 billion.
The local currency has been strengthened by the recent decrease in global oil prices, given Pakistan’s continued reliance on imported energy.
As it has for the previous five months, financial analysts forecast that the currency would stay constant at its present levels until December 2024.
According to the Exchange Companies Association of Pakistan (ECAP), the rupee held steady at Rs280.25/$ for the second day in a row on the open market.
