State Bank forex reserves expected to hit USD 18bn this month

The central bank said on Monday that it is confident of meeting its target of $18 billion in foreign exchange reserves for the outgoing fiscal year, with remittances expected to exceed $41 billion.

Governor of the State Bank of Pakistan Jameel Ahmad informed analysts following the monetary policy meeting that most debt repayments for FY26 have either been completed or rolled over/refinanced, except for $700 million due in the next two weeks.

The SBP expects remittances to remain above $41 billion, approaching $42 billion for FY26, consistent with the estimates provided in January. The bank anticipates the upward trend in inflows will continue.

The SBP expects the current account deficit to remain at the lower bound of the earlier projected range of 0-1 per cent of GDP for FY26 due to strong remittances and inflows in Roshan Digital Accounts, despite higher petroleum imports. The official inflows provided critical support in meeting external obligations. These developments have facilitated ongoing FX purchases and buildup in the SBP’s FX reserves.

According to the central bank, its forward liabilities declined to $1.2 billion at present, which is way below than $1.5 billion level set by the IMF. The SBP believes the impact of the concessionary financing announced in the recent budget is likely to be limited due to its relatively small scale and conditional disbursement criteria. Most schemes are designed to support exports or expand export-oriented capacity, which should contribute positively to industrial growth. Banks are currently offering financing under the Export Finance Scheme (EFS) at 4.5 per cent, absorbing a 1.0 per cent cost that has risen following the hike in interest rates in April.

Source: The International News Pakistan