KARACHI: The net foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $567 million to $12.54 billion during the week ending July 30, 2020, according to data released by the central bank on Thursday.
Net foreign reserves held by commercial banks increased to $7.02 billion, from the $6.93 billion during the week prior. The total liquid foreign reserves held by the country stood at $19.56 billion, an increase from $18.9 billion recorded last week.
The SBP said the increase could be attributed to inflows from multilateral and bilateral agencies including $505.5 million received from the World Bank.
The SBP has received significant inflows in the two months. It received a cumulative total of $1.24 billion from the World Bank, $503 million from Asian Development Bank, $500 million from the Asian Infrastructure Investment Bank and $1.3 billion as GOP loan disbursement from China.
These funds are critical for the SBP, as they act as an important buffer. Analysts have said that the decision to cut the interest rate by 100 basis points to 7pc in the last monetary policy meeting took into account the incoming inflows, among other factors.
The increase is also a reverse form the prior week ending July 24, which was the first time reserves dipped in the month of July. Net reserves had steadily risen since the week of July 2, after hitting below the $10 billion-mark during the week ending July 19. That represented the first time reserves had fallen below the $10 billion-mark since in November 2019.
Net reserves have steadily risen since, reaching $12.2 billion in early May, before falling again, mostly on account of external debt repayments.