SBP buys $4.98bn from interbank market to boost forex reserves

The State Bank of Pakistan (SBP) purchased $4.98 billion from the interbank market between June and November 2024 to strengthen its foreign exchange reserves and manage debt obligations, according to the latest data. 

In November alone, the SBP bought $1.151 billion, compared to $1.026 billion in October.

A report by Arif Habib Limited noted that the SBP’s net foreign exchange interventions contributed to a $2.9 billion increase in reserves, with the remaining amount directed toward debt servicing. 

As of February 14, the SBP’s reserves stood at $11.20 billion, covering more than two months of imports. 

While the reserves showed slight improvement after three weeks of decline, ongoing external debt repayments and a widening current account deficit—driven by an expanding trade gap—could exert renewed pressure, particularly in the absence of additional foreign inflows.

However, expected disbursements from the International Monetary Fund under the Extended Fund Facility, along with climate resilience funding, may provide a cushion for reserves. 

Finance Minister Muhammad Aurangzeb confirmed that an IMF technical mission has arrived in Pakistan to discuss the Climate Resiliency Fund. The mission will stay for three to four days before further deliberations. 

Additionally, another IMF delegation is set to visit in the first week of March for a formal review of Pakistan’s $7 billion loan programme.