SBP purchases $7.76 billion from market to boost reserves, stabilize PKR

Pakistan’s central bank has purchased $7.76 billion from the interbank foreign exchange market over the past 12 months to bolster its foreign exchange reserves and stabilize the national currency, according to official data released this week.

The State Bank of Pakistan (SBP) bought $522 million in May, bringing its total market interventions between June 2024 and May to nearly $7.8 billion, according to figures cited by brokerage firm Topline Securities. In April, the SBP had purchased $473 million.

These interventions helped increase SBP’s reserves from $9.4 billion in June 2024 to $11.5 billion by May. However, officials warned that reserve levels remain subject to fluctuations driven by external debt repayments and incoming foreign inflows.

Pakistan reported a notable turnaround in its external accounts, recording a $2.1 billion current account surplus in the fiscal year ending in June. The improvement was supported by a loan program from the International Monetary Fund, steady remittances, easing inflation, falling interest rates, and a relatively stable rupee.

Despite the gains, the country slipped back into deficit at the start of fiscal year 2026, posting a $254 million current account shortfall in July, compared with a $348 million deficit in the same month last year.

Looking ahead, the SBP projects that reserves will climb to $15.5 billion by December and reach around $17 billion by June 2026.

Pakistan still faces a heavy external debt burden, with the SBP estimating repayments of $25.9 billion in fiscal 2026. This includes $22 billion in principal and $4 billion in interest, roughly in line with last year’s obligations.