SBP reserves rise above $8bn

In a positive development, the State Bank of Pakistan’s (SBP) foreign exchange reserves increased by $25 million, reaching $8.006 billion by the end of the week on April 26. While the central bank did not disclose the specific sources of inflow that bolstered its forex holdings, industry experts suggest that the SBP’s typical strategy involves purchasing dollars from the interbank market to safeguard against declining reserves. In the second week of April, the SBP paid $1bn against the maturity of Eurobonds but did not report a decline in its reserves. Market sources said the central bank was prepared to arrange payments and bought most of the payments from the interbank market. On April 30, the State Bank received $1.1bn from the IMF under the Stand-By Arrangement, which will be reflected in next week’s numbers.