SBP Reserves Jump by Over Half a Billion Dollars

The foreign exchange reserves held by the central bank increased by over half a billion dollars on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Monday. On June 23, the foreign currency reserves held by the SBP were recorded at $4.070 billion, up $533 million compared to $3.537 billion on June 16. In a statement, the central bank said that the increase was due to realization of $300 million proceeds of Government of Pakistan (GoP) commercial loan. Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $9.341 billion, up $477 million over the previous week. The net reserves held by banks stood at $5.271 billion, registering a decrease of $56 million during the week. The increase in the central bank’s reserves has also slightly improved Pakistan’s import cover. Pakistan’s central bank reserves fell below $3 billion at the start of February, however, the reserves have remained over the $4 billion level (measured by week-end levels), barring two exceptions when they sank below $4 billion. Last week, the International Monetary Fund (IMF) and Pakistan reached a staff-level agreement on policies to be supported by a standby arrangement (SBA) of about $3 billion. The staff-level agreement is subject to approval by the IMF Executive Board, with its consideration expected by mid-July. With the SBA in place, Pakistan is expected to secure financial support from friendly countries as well as multilateral partners which will improve the central bank reserves in the coming months.