State Bank of Pakistan's forex reserves record marginal increase

The State Bank of Pakistan (SBP) announced a $46 million increase in foreign reserves, bringing the total to $11.42 billion as of January 31.

The nation's total liquid foreign reserves rose to $16.04 billion with net reserves held by commercial banks at $4.63 billion.

The SBP's foreign exchange reserves surpassing the $11.2 billion mark marks a significant achievement amid ongoing economic challenges.

The central bank's proactive measures during the consolidation phase played a crucial role in managing dollar outflows.

By tightening import restrictions and overseeing the repatriation of profits from foreign investments, the SBP effectively stabilized the currency.

An analyst at Arif Habib Limited reported that in FY24, $12 billion of repayments were made with an equivalent amount rolled over.

For FY25, the outlook appears cautiously optimistic. External debt repayments are projected to total $26.1 billion, with expectations of rolling over $16.4 billion, leaving a manageable net repayment of $3.7 billion.

Following the International Monetary Fund (IMF) disbursement, Pakistan is well-positioned to attract inflows from multilateral and bilateral lenders.

Initiatives to boost foreign direct investment, enhance export performance, and re-enter international capital markets are anticipated to further bolster the external account. With these strategic initiatives, the SBP is projected to close FY25 with reserves estimated at $13 billion.