The State Bank of Pakistan (SBP) has stepped up its dollar purchases from the interbank market in the current fiscal year, buying $5.81 billion in the first eight months of FY26.
The number was up from $5.33 billion purchased in the same period a year earlier.
The central bank's accumulation drive aims to rebuild external buffers and stabilize Pakistan's foreign exchange position.
February alone saw $933 million in dollar buying, four times the $223 million bought in February 2025.
Cumulative dollar buying since the SBP began publicly reporting interventions in June 2024 has reached about $14.06 billion. In all of FY25, net purchases totaled $7.68 billion.
Why is the SBP buying dollars from the interbank market?
Analysts said the sustained intervention reflects improved external account stability, higher remittance inflows, and a calm currency market. The conditions allow the SBP to absorb excess dollar liquidity without rupee volatility.
The purchases are also aimed at meeting quantitative targets under Pakistan's International Monetary Fund (IMF) program which requires reserve buildup and a market-based exchange rate regime.
"The SBP is clearly utilizing the current stability window to rebuild reserves and strengthen Pakistan's external position ahead of large debt repayments," a Karachi-based currency analyst said.
"The pace of buying indicates the central bank is prioritizing reserve accumulation while keeping the rupee broadly stable," the analyst added.
How is Pakistan's external sector performing?
The aggressive dollar absorption comes as Pakistan's external sector shows signs of recovery. Improved exports, stronger workers' remittances, and tighter controls on speculative currency demand have supported the trend.
Analysts expect the SBP to keep buying dollars in the coming months if inflows remain stable and the current account stays manageable.
Will the SBP continue buying dollars?
"Unless oil prices spike sharply or external financing conditions deteriorate, the SBP is likely to maintain its reserve accumulation strategy through the remainder of FY26," another analyst said.
"The central bank appears comfortable with the rupee's current trading range and will continue absorbing surplus inflows whenever available," the analyst added.
Economists cautioned that persistent large-scale intervention could become challenging. Accelerating import demand or geopolitical tensions could place renewed pressure on Pakistan's external account.
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