Pakistan’s economic landscape recently witnessed a notable surge in its foreign exchange reserves, signalling some sigh of relief for the nation. According to the latest data released by the State Bank of Pakistan (SBP), foreign exchange reserves surged by $17.2 million or 0.22% WoW (Week over Week) to reach $7.91 billion by the end of the week on March 8, 2024. This upward trajectory indicates a strengthening position in the global financial market.
Similarly, the total reserves of the country experienced a turnaround recently, increasing by $131.3 million or 1.01% WoW, reaching a total of $13.15 billion. Commercial banks also played its part in this surge, witnessing an increase of $114.1 million or 2.23% WoW, with reserves reaching $5.24 billion.
IMF REVIEW: A CRUCIAL MILESTONE
In a recent development, Pakistan is gearing up for the second review of its Stand-By Arrangement (SBA) with the International Monetary Fund (IMF), scheduled from March 14 to 18, 2024. This review holds immense significance as it marks the final assessment under the SBA. Upon reaching a Staff level agreement, the awaited final tranche of $1.1 billion will be disbursed, pending approval from the Executive Board of the IMF.
FISCAL YEAR INSIGHTS
Throughout the current fiscal year, Pakistan has showcased a commendable increase in its total liquid foreign reserves, amounting to $3.99 billion or 43.57%. Moreover, the ongoing calendar year has witnessed a growth of $0.48 billion or 3.77%, further solidifying the country’s economic resilience.
CURRENT HOLDINGS
Here’s a quick summary of the recent changes in foreign reserves:
- State Bank of Pakistan: $7.91 billion (March 8, 2024) with a change of $17.20 million or 0.22% WoW.
- Net Foreign Reserves Held by Banks: $5.24 billion (March 8, 2024) with a change of $114.1 million or 2.23% WoW.
- Total Liquid Foreign Reserves: $13.15 billion (March 8, 2024) with a change of $131.3 million or 1.01% WoW.
| Reserve Type | Amount (March 8, 2024) | Change | Percentage Change (WoW) |
|---|---|---|---|
| State Bank of Pakistan | $7.91 billion | $17.20 million | 0.22% |
| Net Foreign Reserves Held by Banks | $5.24 billion | $114.1 million | 2.23% |
| Total Liquid Foreign Reserves | $13.15 billion | $131.3 million | 1.01% |
PSX AND THE NEW FINANCE MINISTER
On Thursday, the Pakistan Stock Exchange (PSX) rebounded, surging over 1,000 points after two days of decline, with the KSE-100 index climbing 1.59% to reach 65,064.26 mid-afternoon, attributed to Finance Minister Aurangzeb Khan’s optimistic remarks on economic management and investment attraction, prioritizing reduced government spending and foreign investment over aid.
Khan’s confidence in wrapping up the IMF program and securing a crucial $1.1 billion tranche, coupled with expectations of relaxed monetary policy and compliance with IMF standards, bolstered investor sentiment. The impending arrival of an IMF delegation on March 14 further fueled market optimism.
