SBP Reserves Rise for Second Consecutive Week

According to data released by the State Bank of Pakistan (SBP) on Thursday, the central bank’s foreign exchange reserves increased for the second week in a row.

The SBP’s foreign currency reserves were $3.259 billion on February 17, up $66 million (or 2.1 percent) from 3.193 billion on February 10.

Last week, central bank reserves increased by $276 million, or nearly 10%, after falling to a dangerously low level of less than $3 billion the previous week.

The country’s total liquid foreign currency reserves, including net reserves held by banks other than the SBP, stood at $8.727 billion, up $24 million from the previous week. Bank net reserves stood at $5.468 billion, a $41 million decrease from the previous week.

According to Arif Habib Limited, current reserves are sufficient for a 0.68-month import cover (approximately 20 days).

Reserves set to strengthen

The reserves are expected to grow in the coming weeks as Pakistan moves closer to a staff-level agreement with the International Monetary Fund (IMF), which will not only unlock a $1.1 billion loan tranche but also result in financial assistance from friendly countries.

The reserves are also set to receive a significant cash injection this week, as the Board of Directors of the China Development Bank has approved a $700 million facility for Pakistan.

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