Tag: foreign exchange reserves

  • State Bank’s foreign exchange reserves surge by $112 million in a week

    State Bank’s foreign exchange reserves surge by $112 million in a week

    Foreign exchange reserves held by the State Bank of Pakistan (SBP) saw a rise of $112 million over the past week, bringing the total to $9.4 billion as of August 23, according to data released on Thursday.

    “During the week ending on August 23, 2024, SBP reserves increased by $112 million, reaching $9.4 billion,” the bank stated in its report. This follows a smaller increase of $19 million the previous week.

    In total, the country’s liquid foreign reserves reached $14.77 billion, with commercial banks holding $5.37 billion of this amount. The central bank did not provide any specific reason for the increase in its reserves.

    Read more: Gold price falls from peak, now at Rs261,500 per tola

    The rise in reserves comes as Pakistan seeks to raise up to $4 billion from Middle Eastern commercial banks by the next fiscal year (FY26). This effort is part of a broader strategy to address the country’s external financing needs, as explained by SBP Governor Jameel Ahmad in a recent interview.

    Ahmad also mentioned that Pakistan is in the final stages of securing an additional $2 billion in external funding, which is crucial for obtaining the International Monetary Fund (IMF) approval for a $7 billion bailout programme.

    In related financial news, the international price of gold rose to $2,516 per ounce on Thursday, marking an increase of $4 during the day, according to the All Pakistan Gems and Jewellery Traders and Exporters Association (APGJSA). Silver prices, however, remained steady at Rs2,950 per tola.

  • Moody’s upgrades Pakistan’s credit rating to Caa2, citing improved economic stability

    Moody’s upgrades Pakistan’s credit rating to Caa2, citing improved economic stability

    Moody’s Investors Service has upgraded Pakistan’s long-term issuer rating from “Caa3” to “Caa2” with a stable outlook, reflecting a moderate improvement in the country’s macroeconomic conditions and external financial position.

    This decision follows a similar move by Fitch Ratings in July, which upgraded Pakistan’s credit rating from “CCC” to “CCC+.”

    Moody’s stated that the upgrade is a result of reduced default risks, which are now more consistent with a Caa2 rating.

    This improvement is partly due to greater certainty in Pakistan’s external financing, bolstered by the sovereign’s staff-level agreement with the International Monetary Fund (IMF) on 12 July 2024, for a 37-month Extended Fund Facility (EFF) worth $7 billion. The IMF Board is expected to approve the EFF in the coming weeks.

    Pakistan’s foreign exchange reserves have nearly doubled since June 2023, although they remain below the levels required to meet its external financing needs. The country continues to rely on timely support from official partners to fully meet its external debt obligations.

    Despite the upgrade, Pakistan’s Caa2 rating still reflects very weak debt affordability, which poses a significant risk to debt sustainability. Moody’s expects interest payments to consume about half of the government’s revenue over the next two to three years. The rating also takes into account the country’s weak governance and high political uncertainty.

    The stable outlook indicates a balance of risks, with potential for further improvement if the government can reduce its liquidity and external vulnerability risks and achieve better fiscal outcomes, supported by the IMF programme.

    Sustained implementation of reforms, particularly those aimed at increasing government revenue, could enhance debt affordability. Timely completion of IMF reviews would enable Pakistan to secure continued financing from official partners, essential for meeting external debt obligations and rebuilding foreign exchange reserves.

    The upgrade to Caa2 from Caa3 also applies to the backed foreign currency senior unsecured ratings for The Pakistan Global Sukuk Programme Co Ltd, which Moody’s views as direct obligations of the Government of Pakistan. The outlook for The Pakistan Global Sukuk Programme Co Ltd is positive.

    Additionally, Moody’s has raised Pakistan’s local and foreign currency country ceilings to B3 and Caa2 from B3 and Caa1, respectively.

    The two-notch gap between the local currency ceiling and the sovereign rating is due to the government’s significant role in the economy, weak institutions, and high political and external vulnerability risks.

    The two-notch gap between the foreign currency ceiling and the local currency ceiling reflects limited capital account convertibility and relatively weak policy effectiveness.

  • SBP-held foreign exchange reserves climb to $9.153 billion with $51 million increase

    SBP-held foreign exchange reserves climb to $9.153 billion with $51 million increase

    The State Bank of Pakistan (SBP) has reported an increase of $51 million in its foreign exchange reserves, which reached $9.153 billion for the week ending August 2. The central bank has not disclosed the source of this inflow.

    This rise marks the second consecutive week of increases in the SBP’s reserves, which had previously declined significantly from $9.42 billion on July 12 to $9.027 billion on July 19.

    Overall, the country’s total foreign exchange reserves have risen to $14.472 billion, with $5.318 billion held by commercial banks.

    The SBP’s reserves are a key indicator of financial stability. By the end of the fiscal year 2024, reserves had increased to $9.389 billion, a substantial rise from $4.44 billion in June 2023. This increase has contributed to stabilising the exchange rate and boosting confidence among foreign investors.

    The exchange rate has remained stable for the past four months, attracting significant foreign investment. In this period, inflows into domestic bonds have reached their highest levels since before the Covid-19 pandemic, with $258 million received in July and $230 million in May.

    Looking ahead, financial analysts anticipate that the SBP’s reserves could reach up to $13 billion by the end of 2025, supported by new inflows from an IMF loan programme.

  • SBP-held forex reserves surge by $18.6 million to $9.42 billion

    SBP-held forex reserves surge by $18.6 million to $9.42 billion

    The latest figures from the State Bank of Pakistan (SBP) reveal a slight increase in the country’s foreign exchange reserves. During the week ending July 12, 2024, SBP’s reserves grew by $18.6 million, marking a 0.20 per cent rise to reach $9.42 billion.

    In parallel, Pakistan’s overall foreign reserves, including both SBP and commercial banks, increased by $58.8 million, or 0.40 per cent, totaling $14.7 billion.

    Commercial banks in Pakistan also saw a rise in their reserves, which grew by $40.2 million, or 0.77 per cent, reaching $5.28 billion.

    Since the start of the fiscal year, SBP’s reserves have grown by $34.2 million, reflecting a 0.36 per cent increase. Notably, in the current calendar year alone, reserves have surged by $1.2 billion, representing a notable 14.63 per cent rise.

    These developments signify positive momentum in Pakistan’s foreign exchange reserves, contributing to a more stable economic outlook for the nation.

  • SBP’s forex reserves decrease by $239 million in a week due to debt repayments

    SBP’s forex reserves decrease by $239 million in a week due to debt repayments

    Foreign exchange reserves held by the State Bank of Pakistan (SBP) fell by $239 million, reaching $8.896 billion as of June 21, according to data released by the central bank on Thursday.

    The total liquid foreign reserves held by Pakistan stood at $14.207 billion, with net foreign reserves held by commercial banks at $5.311 billion. The central bank attributed the decline to external debt repayments.

    “During the week ended on June 21, 2024, SBP reserves decreased by $239 million to $8.896 billion due to external debt repayments,” the SBP stated.

    This comes after a $31 million increase in the central bank’s reserves the previous week. In May, the SBP’s reserves had surged by $1.114 billion, surpassing $9 billion for the first time in nearly two years.

    This increase was primarily due to the disbursement of the last $1.1 billion tranche from the International Monetary Fund (IMF) under its $3 billion Stand-By Arrangement.

    The fluctuating reserves highlight the ongoing financial challenges faced by Pakistan, particularly in managing its external debt obligations and maintaining a stable economic outlook.

  • Record high: Overseas workers’ remittances hit $3.24 billion in May 2024

    Record high: Overseas workers’ remittances hit $3.24 billion in May 2024

    In May, overseas workers’ remittances soared by 54.2 per cent compared to the same period last year, reaching $3.24 billion, according to the latest data from the State Bank of Pakistan (SBP).

    This significant increase from $2.1 billion in May last year indicates a substantial boost in remittances.

    Month-on-month, there was a notable 15.3 per cent increase in remittances, totaling $2.81 billion in the previous month.

    Cumulatively, in the 11 months of the fiscal year 2023-24, total remittances amounted to $27.09 billion, showing a 7.75 per cent increase from $25.15 billion received in the same period last fiscal year.

    Saudi Arabia retained its position as the leading contributor, with remittances amounting to $819.28 million, marking a 56.4 per cent increase from the previous year. The UAE followed closely, with remittances of $668.48 million, showing a staggering 99.0 per cent year-on-year increase.

    Remittances from Pakistani workers in the UK surged to $473.22 million, a significant 54.4 per cent increase from the same month last year. Meanwhile, inflows from the USA amounted to $359.55 million, up by 39.8 per cent year-on-year.

    Additionally, remittances from Pakistanis working in EU countries witnessed a substantial 36.4 per cent year-on-year increase, reaching $339.99 million, according to the data provided by SBP.

  • SBP-held foreign exchange reserves rise by $15.8 million to $9.11 billion

    SBP-held foreign exchange reserves rise by $15.8 million to $9.11 billion

    The State Bank of Pakistan (SBP) reported a modest increase in its foreign exchange reserves, rising by $15.8 million or 0.17 per cent week-on-week (WoW) to reach $9.11 billion as of May 31, 2024, according to data released on Thursday.

    The central bank did not provide specific reasons for this increment.

    Conversely, Pakistan’s total reserves saw a decline, falling by $99.8 million or 0.70 per cent WoW to $14.22 billion. This reduction was primarily attributed to a significant drop in reserves held by commercial banks, which decreased by $115.6 million or 2.21 per cent WoW, settling at $5.11 billion.

    Since the start of the current fiscal year, the SBP’s reserves have experienced a substantial increase of $4.64 billion or 103.95 per cent.

    This notable rise is largely due to Pakistan securing the International Monetary Fund’s (IMF) Stand-By Arrangement (SBA) of approximately $3 billion by the end of June last year, which facilitated access to additional multilateral and bilateral funding.

    In the current calendar year, the SBP’s reserves have increased by $888.3 million or 10.8 per cent, reflecting a steady improvement in the country’s financial standing.

  • Pakistan’s forex reserves decline by $63.3 million to $9.09 billion

    Pakistan’s forex reserves decline by $63.3 million to $9.09 billion

    The State Bank of Pakistan (SBP) has reported a marginal decline in the nation’s foreign exchange reserves, indicating a decrease of $63.3 million or 0.69 per cent week over week (WoW) to $9.09 billion, according to data released on Thursday.

    The central bank attributed this downturn primarily to debt repayments. In a statement issued by the SBP, it was highlighted that during the week ending May 24, 2024, SBP reserves experienced a $63 million decrease to reach $9.09 billion, primarily due to external debt repayments.

    Similarly, Pakistan’s overall reserves witnessed a decrease of $270 million or 1.85 per cent WoW, amounting to $14.32 billion. Furthermore, commercial banks saw a decline in reserves by $206.7 million or 3.81 per cent WoW, totaling $5.22 billion.

    Despite these fluctuations, the current fiscal year has seen a remarkable increase in SBP-held reserves, amounting to $4.63 billion or 103.6 per cent.

    This surge follows Pakistan’s attainment of the International Monetary Fund’s (IMF) Stand-By Arrangement (SBA) of approximately $3 billion by the end of June last year.

    This arrangement not only bolstered the nation’s reserves but also facilitated access to additional multilateral and bilateral funding.

    Furthermore, the ongoing calendar year has witnessed a notable increase of $872.5 million or 10.61 per cent in reserves, reflecting continued efforts to stabilise and strengthen Pakistan’s economic position.

  • SBP-held foreign exchange reserves rise to $9.14 billion

    SBP-held foreign exchange reserves rise to $9.14 billion

    During the week ending May 10, 2024, the State Bank of Pakistan (SBP) reported a notable uptick in its foreign exchange reserves, marking an increase of $15.2 million or 0.17 per cent week-on-week (WoW), bringing the total to $9.14 billion.

    This data, released by the central bank on Thursday, underscores a positive trend in the country’s monetary reserves.

    Notably, the SBP did not provide specific insights into the driving factors behind this increase.

    According to a statement issued by the SBP, “During the week ending May 10, 2024, SBP reserves experienced a $15 million increment, reaching $9.14 billion.”

    Simultaneously, Pakistan’s overall reserves recorded a significant rise, climbing by $167.5 million or 1.16 per cent WoW to $14.63 billion.

    This increase encompasses reserves held by commercial banks as well, which surged by $152.3 million or 2.85 per cent WoW to reach $5.49 billion.

    Examining the broader fiscal landscape, the current fiscal year has witnessed a substantial uptick in total liquid foreign reserves, surging by $5.47 billion or 59.68 per cent. Moreover, the ongoing calendar year has seen a notable increase of $1.95 billion or 15.41 per cent.

    This surge in reserves reflects positively on Pakistan’s economic stability and its ability to manage external financial obligations, contributing to investor confidence and fostering a favorable environment for economic growth.

  • SBP-held forex reserves rise by $25 million to reach $8 billion

    SBP-held forex reserves rise by $25 million to reach $8 billion

    The foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $25 million on a weekly basis, reaching $8 billion as of April 26, according to data released on Thursday.

    Despite this modest increase, the country’s total liquid foreign reserves, including holdings in commercial banks, remained at $13.3 billion, with net foreign reserves held by commercial banks totaling $5.3 billion.

    While the central bank did not specify a reason for the uptick, the slight increase comes after a recent dip.

    Last week, the central bank’s reserves had declined by $74 million, causing them to fall below the $8 billion mark.

    This decline had raised concerns about the stability of Pakistan’s foreign exchange position.

    Meanwhile, Pakistan’s financial stability received a boost from the International Monetary Fund (IMF), which disbursed $1.1 billion in the final tranche of the $3 billion Stand-By Arrangement (SBA) on Tuesday.

    This funding follows approval by the IMF’s Executive Board and is expected to be reflected in the SBP’s reserves for the week ending May 3, 2024.

    Despite these recent inflows, Pakistan faces ongoing challenges in maintaining a robust foreign exchange reserve.

    The country is heavily reliant on external financing, and fluctuations in reserve levels can impact economic stability.

    As the central bank works to stabilise its reserves, the broader economy remains sensitive to changes in external funding and currency exchange rates.