KARACHI: Positively, by the conclusion of the week on April 26, the State Bank of Pakistan’s (SBP) foreign exchange reserves had climbed by $25 million to $8.006 billion.
The SBP typically buys dollars from the interbank market as a precaution against dwindling reserves, according to industry analysts, even if the central bank did not reveal the precise sources of inflow that supported its FX holdings.
The SBP paid $1 billion against the maturity of Eurobonds in the second week of April, although it did not disclose a decrease in reserves. According to market sources, the central bank purchased the majority of the payments from the interbank market and was ready to arrange payments.
The State Bank got $1.1 billion from the IMF on April 30 as part of the Stand-By Arrangement; this will be shown in the figures for the following week.
constant exchange rate
The volatility of the exchange rate has stopped due to increased foreign exchange reserves.
To a certain extent, this stability has altered the belief about Pakistan’s ability to fulfill its external repayment commitments on schedule.
International investors have been more interested in Pakistan as a result of the stable exchange rate in both the open and interbank markets. Just in April,
They contributed $20.6 million to the economy in FY24, of which $183.6 million was invested in Treasury bills. This change in investor perception is noteworthy, especially in light of the 2019 pandemic’s lack of interest in domestic bonds.
Nevertheless, bankers claimed that the nation’s persistently poor perception of its external account prevents it from issuing new Eurobonds on the global market.
The government has introduced $300 million in Panda bonds as a test of its capacity. The Chinese market, according to financial analysts, might assist Pakistan in raising this sum. The government will be encouraged to enter the global commercial borrowing market if the Panda bonds are introduced effectively.
By the end of the current fiscal year, SBP’s foreign exchange reserves should be between $10 and $11 billion, according to Finance Minister Mohammad Aurangzeb.
The SBP reported that the nation’s total reserves during the reviewed week were $13.136 billion, of which $5.310 billion came from commercial banks.
