SBP $3.8 Billion Intervention Boosts Reserves by $2.1 Billion in 2024

Between June and October 2024, the State Bank of Pakistan (SBP) purchased a total of $3.8 billion in the domestic foreign exchange (FX) market, according to data released by the central bank. The SBP usually reports its market interventions with a three-month delay.

These interventions contributed significantly to Pakistan’s foreign exchange reserves, which increased by $2.1 billion, with the rest allocated to managing debt repayments, as highlighted by Arif Habib Limited in a report.

The breakdown of the data reveals that the SBP bought $573 million in June, $722 million in July, $569 million in August, $946 million in September, and $1.03 billion in October 2024.

As a result of these purchases, Pakistan’s foreign exchange reserves initially rose by $280 million to reach $9.39 billion in June but then fell by $169 million to $9.22 billion in July.

However, reserves rebounded, climbing by $216 million to $9.44 billion in August, rising by $1.30 billion to $10.74 billion in September, and increasing by $466 million to reach $11.21 billion in October 2024.

By January 24, 2025, the SBP’s reserves stood at $11.37 billion.

In a press conference last week, SBP Governor Jameel Ahmad emphasized that the central bank’s interventions were vital in boosting reserves to $11.5 billion in December 2024, which helped stabilize the rupee-dollar exchange rate, currently around Rs 278-279 per dollar. Without these interventions, reserves would have remained significantly lower, leading to further depreciation of the rupee.

“If the central bank had not stepped in to purchase US dollars, our reserves would not have increased,” Ahmad explained. “This would have resulted in a further depreciation of the rupee against the dollar.”

Governor Ahmad also clarified that the growth in reserves was driven by inflows from workers’ remittances and export earnings, not an increase in foreign debt. He noted that Pakistan’s foreign public debt had stayed below $100 billion from June 2022 to December 2024