Reserves down $1.24b on debt repayments

SBP's forex deposits drop to $17.2b; rupee hits 19-month high; gold steady

KARACHI:

The State Bank of Pakistan's (SBP) foreign exchange reserves decreased by $1,245 million during the week ended July 10, 2026, reaching $17,225.8 million. The decline was mainly due to external debt repayments.

Pakistan's total liquid foreign currency reserves stood at $22,675.5 million, including $17,225.8 million held by the SBP and $5,449.7 million with commercial banks. The latest figures reflect a continued focus on meeting external obligations while maintaining overall reserves stability.

Furthermore, the Pakistani rupee extended its winning streak on Thursday, strengthening past Rs278 to its highest level in 19 months. The local currency closed at Rs277.97, gaining Rs0.03 (0.01%) against the greenback. It had closed at Rs278 on Wednesday.

Globally, the US dollar hovered near a one-month low after soft inflation data reinforced expectations that the Federal Reserve could remain patient on rate hikes. The dollar index stood at 100.47. Meanwhile, gold prices in the local market showed resilience, registering modest gains even as international bullion plunged nearly 2% to a more than two-week low amid escalating geopolitical tensions in the Middle East.

According to the All-Pakistan Gems and Jewellers Sarafa Association, the gold price per tola increased by Rs400 to settle at Rs425,436. The 10-gram gold rose by Rs343 to Rs364,742. On Wednesday, the yellow metal had gained Rs900 per tola to close at Rs425,036.

On the global front, spot gold dropped 1.7% to $3,989.66 per ounce by 12:35 pm EDT (1635 GMT), after falling as much as 2% earlier in the session, its lowest level since July 1, as per Reuters. US gold futures declined 1.4% to $3,994.10.

The sell-off was primarily driven by rising oil prices and strengthening US Treasury yields, which heightened inflation concerns and reinforced expectations of higher-for-longer US rates. Traders now see a 55% probability of a US rate hike in September.

Oil prices rose over 1% as concerns mounted over potential energy supply disruptions. Iran has reportedly asked Yemen's Houthis to stand ready to close the Red Sea oil route if the United States strikes Iranian power infrastructure. This development has added to volatility in the global commodity markets.

Higher oil prices typically stoke inflation, reducing the attractiveness of non-yielding assets like gold. Meanwhile, the US dollar and 10-year Treasury yields also gained ground, further pressuring bullion prices.

In the domestic market, silver prices decreased by Rs134 to Rs6,155 per tola. The latest developments come at a time when global investors are closely monitoring geopolitical risks in the Middle East and their potential spillover effects on energy prices, inflation trajectories, and monetary policy decisions by major central banks.