State Bank of Pakistan bought more than $1 billion in September

The State Bank of Pakistan made its third-highest monthly purchase of U.S. dollars from the market in September, buying more than $1 billion as cumulative purchases since reporting resumed in June 2024 approach $10 billion.

Central bank data showed the State Bank bought $1.023 billion in September. Earlier, it made larger purchases in November and October, totaling $1.151 billion and $1.026 billion, respectively.

Although September purchases crossed the $1 billion mark, the pace of dollar buying during the first quarter of the current fiscal year was slower than in the same period a year earlier.

From July to September this year, the central bank bought about $1.469 billion, compared with $2.237 billion during the same period in 2024.

State Bank Governor Jameel Ahmad said after the monetary policy announcement on Dec. 15 that the bank’s foreign exchange market interventions have broadly remained in line with the previous fiscal year. He said activity was lower in the early months and stronger from September to November, supporting reserve accumulation while meeting external payment obligations.

“As a result, foreign exchange reserves have continued to rise despite ongoing debt repayments, reaching $15.8 billion and exceeding the December 2025 target of $15.5 billion,” Ahmad said.

“With the planned buildup, the SBP aims to raise import cover to around three months by June 2026, broadly in line with the IMF forecast of 2.7 months,” he added.

According to SBP data for the week ended Dec. 18, foreign exchange reserves had risen further to $15.9 billion, nearing the International Monetary Fund’s target.

Since the resumption of reporting, total dollar purchases by the central bank amounted to about $9.726 billion between June 2024 and September 2025. In the fiscal year ended June 30, purchases totaled about $7.684 billion.

Analysts said improvements in economic indicators, fulfillment of key IMF conditions leading to approval of the second tranche of funding, rising foreign exchange reserves and timely external debt payments have improved Pakistan’s sovereign risk profile.

One analyst cited recent rating upgrades by all three major agencies, a sharp compression in Eurobond yields to single-digit levels, and a steep decline in the five-year credit default swap spread to around 384 basis points by December this year, from 7,851 basis points in December 2022.

The improvement reflects stronger policy credibility and investor confidence, the analyst said.