SBP buys over $5b from interbank

The central bank has purchased over $5 billion from the market during this fiscal year, a record amount that is equal to two-thirds of Pakistan’s official foreign exchange reserves and also far higher than the size of the International Monetary Fund (IMF) bailout package. While the central bank’s intervention has kept foreign currency reserves stable at $8 billion despite heavy debt repayments, it has also contributed to keeping the value of the rupee low at Rs278 to a dollar. In the absence of these interventions, the parity should have been below Rs250 to a dollar, according to independent analysts. Government and central bank sources told The Express Tribune that these purchases were made to prevent official foreign exchange reserves from sliding below $3 billion due to the absence of major inflows of foreign loans. They said the central bank has purchased much more than $5 billion, and the buying was still continuing.