Pakistan’s total liquid forex reserves cross $16 billion

Pakistan’s total liquid foreign exchange reserves reached $16.076 billion for the week ending November 22, 2024, according to data released by the State Bank of Pakistan (SBP). The central bank’s reserves stood at $11.418 billion, while commercial banks collectively held $4.657 billion.

The increase in reserves signals some stability in Pakistan’s external financial position amid ongoing challenges in the global and domestic economic landscape. In the one week, the SBP held reserves improved by $130 million. 

While this subsides any balance of payment alarms, SBP’s reserve still remains below the critical levels seen in the pre-COVID years when reserves consistently hovered above $20 billion.

Analysts suggest that maintaining this reserve level will be crucial for Pakistan to meet its huge upcoming external debt obligations, manage import costs, and stabilize the Pakistani rupee.

In the previous week, reserves stood at $15.97 billion, indicating a slight improvement in SBP’s holdings. The central bank’s efforts, alongside fiscal consolidation measures, are expected to play a pivotal role in improving foreign exchange liquidity in the coming months. 

It is important to note that Pakistan is currently a part of a 37-month Extended Fund Facility (EFF) of the IMF. The upcoming months will be critical as Pakistan prepares to negotiate with international lenders, while managing external payments and maintaining foreign exchange stability.