Rupee gains with surprise jump in SBP reserves

The State Bank of Pakistan’s (SBP) foreign exchange reserves surprisingly increased by $276 million during the week ended on Feb 10, while the rupee kept recovering its value against the greenback on Thursday. The central bank reported that its foreign exchange reserves rose to $3.192 billion from $2.9bn noted in the preceding week without mentioning the sources of inflows. However, bankers said the central bank procured dollars from banks and the open market after higher inflows of export proceeds. For more than two decades, the SBP has been in the practice of purchasing greenbacks from both markets. Hardly with 18-day import cover, the SBP reserves are not enough to continue with essential imports like fuel and food. The government and stakeholders of the economy look to IMF for an early release of $1.2bn tranche which would lead to unlocking inflows from other lenders and friendly countries.