The State Bank of Pakistan (SBP) reported a $12.5 million rise in its foreign exchange reserves, reaching $12.05 billion for the week ending December 6, 2024. This marks a 0.10% week-on-week (WoW) increase, according to data released on Thursday.
Decline in Total Reserves
Despite the uptick in SBP’s reserves, the country’s total foreign exchange reserves decreased by $19.1 million or 0.11% WoW, settling at $16.6 billion. The decline was primarily attributed to a drop in reserves held by commercial banks.
Commercial Banks’ Reserves Fall
Reserves held by commercial banks fell by $31.6 million, marking a 0.69% WoW decrease. The total reserves with commercial banks now stand at $4.55 billion.
SBP Reserves at Highest Level Since March 2022
The SBP’s foreign exchange reserves have reached levels last seen in March 2022, reflecting stability in the central bank’s holdings.
Recent Surge Due to ADB Loan Proceeds
In the previous week, SBP reserves saw a significant increase of $619.8 million or 5.43%. This surge was driven by loan proceeds from the Asian Development Bank (ADB) under the Climate Change and Disaster Resilience Enhancement Program (CDREP).
KCCI Urges SBP to Cut Policy Rate by 400 Basis Points
Economic Implications
The rise in SBP reserves indicates improved foreign exchange stability, while the decline in overall reserves highlights challenges in managing outflows. Analysts suggest that maintaining reserve levels will be critical to ensure exchange rate stability and meet external obligations.
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