SBP Dollar Purchases Hits Lowest Level In 16 Months
The State Bank of Pakistan reduced its purchases from the interbank foreign exchange market to $154 million in May, the … Read More The post SBP Dollar Purchases Hits Lowest Level In 16 Months appeared first on ProPakistani .
The State Bank of Pakistan (SBP) made the lowest monthly purchase of foreign exchange from the interbank market in 16 months in May, purchasing just $154 million, according to central bank data. This marked a significant decline compared to $635 million bought in April and a total of $7.3 billion during the first 11 months of the current fiscal year.
Analysts suggested the reduction was due to increased demand for dollars in the open market, driven by people traveling to Saudi Arabia for Hajj. The SBP typically steps in to buy excess dollars to bolster its foreign exchange reserves and aid in servicing external debt. At the end of May, the central bank's reserves were $17.2 billion.
Stronger remittances and a relatively narrow current account deficit have helped maintain Pakistan's external position. The SBP aims to increase reserves to over $21 billion by the end of the current fiscal year. The current account deficit narrowed to $328 million in July, down 60% from the previous month and 38% from the same period a year ago.
The SBP anticipates the deficit to stay between zero and 1% of GDP in fiscal year 2027, supported by remittances, strong exports, and export facilitation measures.
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