FX reserves decline by $19m to $16.6b
SBP reserves rise above $12b, highest in three years as gold rises to Rs282,800/tola and rupee settles at 278.23/$
KARACHI:
Pakistan’s total liquid foreign reserves remained largely stable, with a slight decline of $19 million, settling at $16.6 billion as of December 6, 2024. These reserves include $12.05 billion held by the State Bank of Pakistan (SBP), marking the highest level since March 2022, and $4.55 billion held by commercial banks.
The central bank’s reserves increased by $13 million during the week, supported by inflows from the Asian Development Bank (ADB), which exceeded $500 million. This inflow not only pushed reserves above the $12 billion mark but also elevated the import cover to 2.15 months, the highest in nearly three years.
Analysts credit the rise in the SBP reserves to a current account surplus and improved liquidity in the interbank market, highlighting the government’s fiscal adjustments and external support. However, a $33 million decline in reserves held by commercial banks reflects challenges in private-sector liquidity.
“The inflow from ADB has contributed to the elevation of reserves and, in turn, import cover, taking them to their highest levels in almost three years,” said Waqas Ghani Kukaswadia, an analyst at JS Global.
Meanwhile, the reserves held by commercial banks saw a slight decline of $33 million, settling at $4.55 billion, according to Arif Habib Limited (AHL) research head Tahir Abbas.
Despite minor fluctuations, Pakistan’s total foreign reserves remain stable, maintaining an import cover of 2.15 months. “The central bank reserves have been continuously on a rising trend for the last 7-8 weeks owing to a current account surplus and higher liquidity in the interbank market,” said Shankar Talreja, Director of Research at TopLine Securities.
The import cover, a critical measure of a country’s economic stability, remained steady at 2.15 months, calculated based on average imports over the last three months. This marks a significant improvement compared to earlier in the year when import cover dipped to just 1.66 months in June 2024.