Islamabad, 30 August 2024 (TDI): The State Bank of Pakistan (SBP) is responsible for managing Pakistan’s foreign exchange reserves, which saw a $112 million increase in the week ending August 23, 2024.
These foreign exchange reserves had reached a six-week high of $9.4 billion, reportedly due to the central bank’s acquisition of US dollars from local markets.
According to the SBP’s weekly report released on Thursday, the nation’s total reserves reached a 26-month high at $14.78 billion, despite a slight decline of $2.7 million in the reserves held by commercial banks from the previous week.
Though it declined for the second day in a row, dropping by Rs0.19 to a one-week low of Rs278.64 to a dollar, the Pakistani currency did not benefit from the increase in reserves.
The speculation that Pakistan’s export revenues would be negatively impacted by the increase in the cost of products production due to high electricity tariffs and new levies imposed caused the rupee to continue its downward trend.
Over the last five weeks, the SBP’s reserves have increased by a total of $376.2 million, showing continuous improvement.
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High-ranking bank officials had stated in July that they were buying US dollars from local currency markets in order to replenish the reserves, even though the central bank gave no explanation for the increase in reserves in its weekly report.
According to financial experts, there is still more foreign currency available than there is demand for imports. In order to pay down the nation’s maturing foreign debt and increase reserves, the central bank is purchasing the excess inventory.
Despite a slow increase in imports, there is still a greater supply of US dollars than there is demand for them due to strong worker remittance inflows and rising export earnings.
By the time the current fiscal year ends in June 2025, the SBP’s reserves are expected to have increased by $4 billion to $13 billion, according to a July projection.
The weekly report stated that commercial banks’ foreign exchange reserves decreased by $2.7 million to $5.37 billion. The entire reserves of the nation increased to $14.77 billion, an increase of $108.9 million.
While the price of gold increased by $4 to $2,516 per ounce (31.10 grams) on the world market on Thursday, the price of gold fell by Rs2,200 to Rs261,500 per tola (11.66 grams).
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After a three-day break during which the market was closed for various reasons, All Pakistan Saraf Gems and Jewellers Association released gold rates.
