Forex reserves edge up $75m, help rupee recover

State Bank’s reserves reach $9.1b in week ended July 26

KARACHI:

Pakistan’s foreign exchange reserves, held by the State Bank of Pakistan (SBP), rose by $75 million to $9.10 billion in the week ended July 26, 2024, helping the rupee edge up by Rs0.08 from a four-and-a-half-month low against the US dollar in the inter-bank market on Thursday.

According to the SBP weekly update, the foreign exchange reserves recovered following a drop of around $400 million in the prior week. It was the first weekly drop in the past one month due to foreign debt repayments.

The central bank mentioned no reason for the latest growth in its reserves. However, the bank has stated time and again that it is purchasing the surplus supply of US dollars from the local currency markets to replenish the reserves.

The foreign currency reserves held by commercial banks dropped $18.7 million on a week-on-week basis, closing at $5.29 billion. Consequently, the country’s total reserves increased by $56.3 million and settled at $14.39 billion in the week under review.

Pakistani currency on Thursday ended a three-day losing streak and regained Rs0.08 at Rs278.66 against the US dollar in the inter-bank market on the back of developments pertaining to potential raising of foreign financing from China. The currency partially recouped losses after shedding a cumulative Rs0.40 in the prior three days.

The latest recovery came when Pakistan received interest from five Chinese and two local firms in raising foreign financing through the issuance of Panda bonds in China – the second largest economy of the world.