SBP Bought $3.8 Billion From Banks in First 4 Months of FY25

The State Bank of Pakistan (SBP) bought $3.8 billion from the interbank market in June-October 2024 to increase forex reserves by $2.1 billion and meet debt obligations. Of the total, $1.7 billion was allocated for debt servicing. The central bank’s intervention was supported by unexpectedly high remittance inflows, which surged 33 percent to $17.8 billion in the first half of the fiscal year. Despite the dollar purchase, the exchange rate remained stable. The central bank is tipped to purchase an additional $5 billion if remittances continue to increase. Finance Minister Muhammad Aurangzeb has projected total remittances to exceed $35 billion in FY25. The trade deficit widened in December 2024 due to increased imports, but bankers estimate it to remain within range. The current account remains positive at $1.2 billion. The SBP governor estimates a surplus or deficit within 0.5 percent of GDP by the fiscal year’s end.