SBP purchases $7.8bn to check rupee surge

The State Bank of Pakistan (SBP) on Tuesday disclosed that it purchased $7.8 billion from the open market since June 2024, raising the country’s foreign exchange reserves to $14.5bn by end-June 2025 — a move aimed at ensuring external stability but one that could otherwise have strengthened the rupee and boosted imports. Testifying before the National Assembly’s Standing Committee on Finance and Revenue, SBP Deputy Governor Dr Inayat Husain said the central bank’s interventions were aimed at absorbing excess dollar liquidity to build reserves. “If we do not mop up excess funds, the rupee would appreciate sharply — this has no impact on exports, but significantly increases imports,” he warned. Dr Inayat explained that higher reserves helped Pakistan meet its external obligations without relying on fresh foreign loans. While the rupee had recently come under pressure due to a current account deficit —contrasting with last year’s surplus — this was now easing due to coordinated measures by the government and SBP.