FX reserves decline by $19m to $16.6b

Pakistan's total liquid foreign reserves remained largely stable, with a slight decline of $19 million, settling at $16.6 billion as of December 6, 2024. These reserves include $12.05 billion held by the State Bank of Pakistan (SBP), marking the highest level since March 2022, and $4.55 billion held by commercial banks. The central bank's reserves increased by $13 million during the week, supported by inflows from the Asian Development Bank (ADB), which exceeded $500 million. This inflow not only pushed reserves above the $12 billion mark but also elevated the import cover to 2.15 months, the highest in nearly three years. Analysts credit the rise in the SBP reserves to a current account surplus and improved liquidity in the interbank market, highlighting the government's fiscal adjustments and external support. However, a $33 million decline in reserves held by commercial banks reflects challenges in private-sector liquidity.