The State Bank of Pakistan (SBP) reported net foreign exchange (FX) interventions of $223 million in February 2025, bringing total cumulative purchases to $5.3 billion for the first eight months of FY25 (July 2024 to February 2025). As of the end of February, SBP's foreign exchange reserves stood at $11.25 billion.
A trend analysis shows fluctuations in monthly interventions, with a peak of $1.156 billion in October 2024 and a low of $154 million in January 2025, underscoring the central bank's active role in managing the external account and maintaining reserves.
"SBP conducted net FX interventions of $223m during the month of Feb'25, taking cumulative currency purchases to $5.3b during 8MFY25," noted AKD Research. In 2024 alone, Pakistan's central bank made record foreign exchange purchases exceeding $9 billion from the local market to boost its reserves, prompting mixed reactions.
Exchange companies criticised the central bank for excessively favouring exporters without corresponding improvements in performance. They argued that without the SBP's interventions, the rupee might have appreciated to Rs240-250 per US dollar, providing relief to the general public.
On Tuesday, the rupee depreciated by 0.04% day-on-day (DoD) to settle at 282.17 against the dollar, a loss of Rs0.11 from Monday's close of 282.06. The currency has weakened by 1.28% on a calendar year-to-date basis and 1.36% on a fiscal year-to-date basis.
Additionally, on Tuesday, the SBP held an auction for the outright purchase of Government of Pakistan Ijara Sukuk (GIS) on a deferred payment (Bai Muajjal) basis. It accepted Rs53.7 billion against bids of Rs78.2 billion.
In a separate auction of 10-year semi-annual Pakistan Investment Bonds (PIBs), the central bank received bids worth Rs699.9 billion against a target of Rs200 billionan oversubscription of 3.5 times. The SBP accepted Rs187.2 billion, setting the cut-off rate at 12.12% with a current spread of 0.869%, slightly down from the previous spread of 0.999%.
Meanwhile, the T-bill auction attracted even stronger interest, with bids reaching Rs3.3 trillion against a target of Rs650 billion, according to Optimus Research. The SBP accepted Rs772 billion, with cut-off yields declining across all tenors: 1-month at 11.10% (down 15 basis points), 3-month at 11.15% (down 9 bps), 6-month at 11.18% (down 9 bps), and 12-month at 11.20% (down 15 bps).
Gold prices also declined on Tuesday, in line with global trends. In the local market, the price per tola dropped by Rs3,600 to Rs347,900, while the 10-gram rate fell by Rs3,086 to Rs298,268, according to the All-Pakistan Gems and Jewellers Sarafa Association. A day earlier, the price per tola had dropped by Rs2,600 to Rs351,500.
Globally, gold prices fell for the second straight session following improved risk sentiment after US President Donald Trump postponed tariffs on the European Union. Spot gold slipped 1.4% to $3,296.79 an ounce by 1301 GMT, according to Reuters.
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