Tag: SBP

  • Pakistan’s forex reserves fall by $73.5 million in one week

    Pakistan’s forex reserves fall by $73.5 million in one week

    The State Bank of Pakistan (SBP) reported a significant decline in its foreign exchange reserves for the week ending April 19, 2024, attributing the drop to external debt repayments.

    The central bank’s reserves fell by $73.5 million, a 0.91 per cent week-on-week reduction, bringing the total to $7.98 billion.

    This decrease reflects Pakistan’s ongoing struggles to maintain a stable foreign exchange reserve position amid mounting economic pressures.

    The SBP issued a statement explaining the decline, citing debt repayments as the primary reason for the dip. “During the week ended on April 19, 2024, SBP’s reserves decreased by $74 million to $7.98 billion due to external debt repayments,” the statement read.

    Concurrently, the total reserves of Pakistan, which include those held by commercial banks, also fell. The country’s total reserves dropped by $93.2 million, a 0.7 per cent week-on-week decrease, to $13.28 billion.

    Commercial banks’ reserves diminished by $19.7 million, or 0.37 per cent week-on-week, bringing their total to $5.3 billion.

    Last week, the SBP reported a slight increase in its reserves, up by $14.4 million despite a $1 billion Eurobond repayment. However, this week’s decline indicates continued pressure on the country’s foreign exchange reserves.

    In a recent development, the International Monetary Fund’s (IMF) executive board is set to meet on April 29 to discuss the approval of a $1.1 billion funding tranche for Pakistan.

    This funding represents the second and final installment of a $3 billion standby arrangement with the IMF, which was agreed upon last summer to avert a sovereign default.

    The current arrangement with the IMF is due to expire at the end of this month, prompting Pakistan to seek a new long-term and larger loan from the IMF.

    Finance Minister Muhammad Aurangzeb expressed optimism about the country’s foreign exchange reserves, stating that he expects the reserves held by the SBP to rise to around $9–10 billion by the end of the current fiscal year.

    Despite the recent decline, the total liquid foreign reserves have increased by $4.12 billion, or 44.98 per cent, since the beginning of the fiscal year.

    Additionally, the current calendar year has seen an increase of $0.61 billion, or 4.79 per cent.

    The fluctuations in Pakistan’s foreign exchange reserves underscore the country’s ongoing economic challenges and the critical importance of securing international funding to maintain financial stability.

  • SBP’s foreign exchange reserves rise by $18.5 million

    SBP’s foreign exchange reserves rise by $18.5 million

    The State Bank of Pakistan (SBP) saw an increase in its foreign exchange reserves, rising by $18.5 million or 0.23 per cent week over week (WoW), reaching $8.04 billion by the week ending March 29, 2024, according to the latest data released by the central bank on Thursday.

    However, the country’s overall reserves took a dip, decreasing by $48.7 million, or 0.36 per cent of WoW, and settling at $13.38 billion. 

    This decline is attributed to a drop in reserves held by commercial banks, which fell by $67.2 million, or 1.24 per cent of WoW, reaching $5.34 billion.

    It’s important to note that in the current fiscal year, total liquid foreign reserves have increased by $4.22 billion, or 46.06 per cent. 

    Additionally, the ongoing calendar year has seen an increase of $0.71 billion, or 5.57 per cent.

  • SBP maintains policy rate at 22% for sixth consecutive time

    SBP maintains policy rate at 22% for sixth consecutive time

    The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) has opted to maintain the key policy rate at 22 per cent, marking its sixth consecutive decision to uphold the status quo.

    In its statement released on Monday, the MPC affirmed its decision, stating, “At its meeting today, the MPC decided to keep the policy rate unchanged at 22 per cent.”

    While acknowledging a visible decline in inflation as anticipated in the latter half of Fiscal Year 2024 (H2-FY24), the MPC underscored the persistently high level of inflation and the associated risks, despite a notable deceleration in February. This cautious stance is deemed necessary to steer inflation towards the target range of 5–7 per cent by September 2025.

    Against a backdrop of uncertain inflation projections, major central banks worldwide, including those in advanced and emerging economies, have remained conservative in their monetary policy approaches, as highlighted in the MPC statement.

    Emphasising the importance of sustained targeted fiscal consolidation and timely realisation of planned external inflows, the MPC reiterated that its assessment hinges on these factors.

    Furthermore, the latest economic indicators indicate a moderate upturn in economic activity, primarily driven by a rebound in agricultural output. The external current account balance has outperformed expectations, bolstering foreign exchange reserves despite subdued financial inflows. However, inflation expectations among businesses have steadily risen since December, with consumer expectations inching up in March. Additionally, while global commodity prices have generally remained stable, escalating oil prices, attributed partly to ongoing tensions in the Red Sea, present a notable exception.

    Given the uncertainties surrounding the inflation outlook, compounded by potential upward pressure from administered price adjustments or fiscal measures, the MPC deems it prudent to maintain the current monetary policy stance for the time being.

  • SBP gears up for monetary policy meeting amid rate cut speculations

    SBP gears up for monetary policy meeting amid rate cut speculations

    The State Bank of Pakistan (SBP) has scheduled a meeting of its Monetary Policy Committee (MPC) for Monday, March 18, 2024, to deliberate on the nation’s monetary policy, as announced by the central bank on Friday.

    The SBP intends to release the Monetary Policy Statement on the same day, providing insights into its decision-making process.

    Anticipation looms as a prominent brokerage house foresees a noteworthy chance of the SBP reducing the key policy rate by 100 basis points (bps).

    Currently, the key policy rate stands at a historic high of 22 per cent.

    Arif Habib Limited (AHL) outlined in its recent report the likelihood of the SBP initiating a 100-bps cut in the upcoming policy, potentially marking the commencement of an interest rate reversal cycle.

    Despite Pakistan witnessing a decrease in headline inflation to 23.1 per cent year-on-year in February, as reported by the Pakistan Bureau of Statistics (PBS), down from 28.3 per cent in January, there are calls for cautious action.

  • SBP sees surge of over $17 million in forex reserves

    SBP sees surge of over $17 million in forex reserves

    The latest data released by the State Bank of Pakistan (SBP) revealed a notable rise in the country’s foreign exchange reserves. During the week ending March 8, 2024, SBP’s reserves increased by $17.2 million, marking a 0.22 per cent growth, reaching a total of $7.91 billion.

    Additionally, Pakistan’s overall reserves experienced a surge, ascending by $131.3 million, or 1.01 per cent, week-on-week (WoW), to a sum of $13.15 billion. This increase was further complemented by a rise in reserves held by commercial banks, which climbed by $114.1 million, or 2.23 per cent, to reach $5.24 billion.

    In a significant development, the second review of the stand-by arrangement (SBA) with the International Monetary Fund (IMF) is slated to take place from March 14 to 18, 2024. This review holds particular importance as it marks the final assessment under the SBA. Upon reaching a staff-level agreement, the final tranche of $1.1 billion will be disbursed, subject to approval by the Executive Board of the IMF.

    It is noteworthy that in the current fiscal year, Pakistan has witnessed a substantial increase in its total liquid foreign reserves, amounting to $3.99 billion, or 43.57 per cent. Similarly, the ongoing calendar year has seen a rise of $0.48 billion, or 3.77 per cent.

  • IMF mission to arrive tomorrow for final review discussions on Pakistan’s SBA

    IMF mission to arrive tomorrow for final review discussions on Pakistan’s SBA

    The International Monetary Fund (IMF) mission is poised to commence vital economic review discussions from March 14 to 18, 2024, marking the conclusive evaluation of Pakistan’s Standby Arrangement (SBA).

    Sources within the Finance Ministry have confirmed that the IMF mission is scheduled to touch down in Pakistan tomorrow night, kickstarting a series of pivotal discussions set to unfold over the next four days.

    During this intensive period, the IMF mission is slated to engage in comprehensive dialogue with Pakistan’s economic team. Key participants include representatives from the Finance Ministry, Energy Ministry, Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Planning Commission, and the Petroleum Division.

    Insiders suggest that the IMF mission will delve into discussions covering a spectrum of economic facets. Talks are expected to encompass various critical sectors, including finance, energy, taxation, and central banking.

    Furthermore, in parallel with these discussions, preliminary conversations are anticipated to unfold regarding the potential initiation of a new loan programme with the IMF mission. This prospect adds an extra layer of significance to the ongoing economic deliberations as Pakistan navigates its financial landscape in the pursuit of sustainable economic growth.

    Stay tuned for comprehensive coverage as the IMF mission engages in the final review of Pakistan’s Standby Arrangement, paving the way for crucial decisions that could shape the nation’s economic trajectory in the coming months.

  • SBP’s foreign exchange reserves rise by $13 million

    SBP’s foreign exchange reserves rise by $13 million

    In a positive development for Pakistan’s economic landscape, the State Bank of Pakistan (SBP) reported a weekly increase of $13 million in its foreign exchange reserves, reaching a total of $8.05 billion as of February 9, according to data released on Thursday.

    The country’s overall liquid foreign reserves now stand at $13.15 billion, with commercial banks holding a significant share of $5.1 billion in net foreign reserves.

    The central bank, however, did not provide specific details or reasons for the notable upswing in reserves during the mentioned week.

    In a statement, the SBP stated, “During the week ended on February 9, 2024, the SBP’s reserves increased by US$ 13 million to US$ 8,056.5 million.”

    This positive development comes on the heels of last week’s decrease in Pakistan’s central bank reserves, which experienced a dip of $173 million.

    The recent rebound signals resilience and stability in the nation’s economic standing, and financial analysts are likely to scrutinise the factors contributing to this uptick in the coming days.

    As the global economic landscape continues to evolve, Pakistan’s foreign exchange reserves play a crucial role in navigating economic challenges, and the recent increase reflects ongoing efforts to bolster the country’s fiscal strength.

    Experts anticipate that a robust foreign reserve position will provide a buffer against external shocks and instill confidence in the financial markets.

  • Pakistan’s forex reserves dip by $173 million, SBP cites debt repayments

    Pakistan’s forex reserves dip by $173 million, SBP cites debt repayments

    The State Bank of Pakistan (SBP) has reported a decrease of $173 million in its foreign exchange reserves on a weekly basis, revealing a total of $8.04 billion as of February 2, according to data released on Thursday.

    The country’s overall liquid foreign reserves are reported to stand at $13.09 billion, with commercial banks holding net foreign reserves amounting to $5.05 billion.

    The SBP has identified debt repayments as the primary factor contributing to the decline in reserves. In an official statement, the SBP stated, “During the week ending on 2-Feb-2024, SBP’s reserves decreased by US$ 173 million to US$ 8,044.0 million due to debt repayments.”

    This follows a trend from the previous week when Pakistan’s central bank reserves experienced a decrease of $54 million. The ongoing challenges related to debt servicing continue to impact the nation’s foreign exchange reserves.

  • SBP seeks design ideas from students, designers for new banknotes

    SBP seeks design ideas from students, designers for new banknotes

    In a significant move to enhance security features and align with technological advancements, the State Bank of Pakistan (SBP) has kicked off the process of designing and issuing a new series of banknotes covering all existing denominations.

    The SBP, in an official statement released on Tuesday, emphasised the complexity of the issuance process, which involves multiple meticulous steps and stages that demand careful planning and coordination among various stakeholders. Despite the general timeline of 2-3 years for launching a new banknote series, the SBP aims to expedite the process and complete it within the next two years.

    As an initial step towards the design process, the SBP has organised an art competition for the new banknote series. This competition is expected to yield diverse and creative ideas and themes that will form the basis for the subsequent phases of development.

    The finalised concepts will be shared with renowned professional banknote designers, who will be selected through a competitive process to transform these ideas into the final printable designs for each denomination.

    The final designs will then undergo scrutiny by the federal government for approval, ensuring that they meet the necessary standards and security features. The SBP assured the public that the existing banknote series would continue to remain in circulation even after the introduction of the new series.

    Any decision regarding the withdrawal of the existing banknotes will be executed gradually and in a phased manner, contingent upon the successful issuance and sufficient circulation of the new banknotes.

    The central bank highlighted that the periodic introduction of new banknote series, occurring approximately every 15–20 years, is a common practice among central banks. This practice aims to bolster the integrity of banknotes and integrate the latest technological developments in design and security features, ensuring a secure and reliable currency system for the nation.

  • State Bank of Pakistan unveils plans for new currency notes with international security features

    State Bank of Pakistan unveils plans for new currency notes with international security features

    The State Bank of Pakistan (SBP) on Monday announced plans to issue new currency notes featuring international security features. 

    The central bank assured a seamless transition, avoiding disruptions akin to India’s 2016 demonetisation. 

    Governor Jameel Ahmad stated that the new notes would have updated serial numbers, designs, and heightened security features. The design framework is expected to be finalised by March.

    The decision, prompted by concerns over counterfeit currency, was cautiously welcomed by financial experts. 

    CEO Khurram Schehzad acknowledged the move as a “positive development” but cautioned against premature assessment. 

    He emphasised the need to address higher-denomination notes and questioned their effectiveness, citing challenges faced by countries like India after demonetisation.

    Schehzad underscored the importance of evaluating the impact on black money, highlighting the public’s inclination to convert cash into alternative assets amidst inflation. 

    He urged the SBP to consider reducing the number of higher-denomination notes in circulation to address economic concerns, emphasising the role of controlled currency printing in curbing inflation.