The State Bank of Pakistan's (SBP) foreign exchange reserves rose $28 million during the week ended August 29, 2025, reaching $14.30 billion.
According to data released by the central bank on Thursday, the country's total liquid foreign reserves stood at $19.66 billion. Of this, commercial banks held $5.36 billion in net reserves.
Analysts note that maintaining reserves above $14 billion is critical for Pakistan as it navigates external financing requirements and debt repayments in the coming months.
The reserves of $19.66 billion offer import cover for only 2.32 months, according to Arif Habib Limited.
Furthermore, following its fundraising of Rs551.97 billion on Wednesday through auctions of government securities, the SBP conducted two separate open market operations (OMOs) on Thursday to inject liquidity into the financial system, utilising both Shariah-compliant and conventional instruments.
In the Shariah-compliant Mudarabah-based OMO, the SBP injected Rs10 billion (face value) for a four-day tenor at a return of 11.14% per annum. The auction received one quotation, which was fully accepted.
Simultaneously, the SBP conducted a conventional reverse repo operation, injecting Rs544 billion (face value) for the same four-day tenor. The accepted weighted average rate was 11.06% per annum. The OMO attracted 10 quotes, of which eight were accepted.
Additionally, the Pakistani rupee extended its upward trend against the US dollar, inching up 0.01% in the inter-bank market. By the day's close, the local currency settled at 281.67 per dollar, marking an increase of four paisa compared to Wednesday's close at 281.71. This also marked the rupee's 20th consecutive session of gains.
Globally, the US dollar eased during a volatile trading week as investors reacted to bond market fluctuations and data pointing to a cooling labour market, heightening expectations of an imminent Federal Reserve rate cut.
Meanwhile, gold prices in Pakistan remained unchanged, after hitting a record high a day earlier. In the local market, the price of gold per tola stayed at Rs376,700, while the rate for 10 grams stood steady at Rs322,959, according to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA).
In the international market, however, bullion prices slipped as investors booked profits following a record-breaking rally. Traders now await the closely watched US payrolls report for further guidance on the Federal Reserve's policy outlook.
Spot gold fell 0.4% at $3,544.15 per ounce by 11:27 am EDT (1527 GMT), while US gold futures dipped 0.9% to $3,603.70, according to Reuters.
Interactive Commodities Director Adnan Agar noted that gold continues to trade on the upside despite some pullback. "Last night, gold hit a high of $3,578 before easing to open at $3,560 today (Thursday). Prices tested a low of $3,510 and were near $3,550. There is a chance of a correction towards $3,470 before another upward move," he said.
Agar added that with the US Federal Open Market Committee (FOMC) meeting slated for September, the market could see fresh momentum. "Gold may cross $3,600 and even test $3,700 before a deeper correction sets in, possibly in October," he observed.
Analysts say the local bullion market is likely to mirror international trends in the coming days, with investor sentiment tied closely to signals from the Federal Reserve.
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