SBP builds reserves on record inflows, dollar buying

The State Bank of Pakistan (SBP) ramped up its foreign exchange reserves to a 39-month high of $14.5 billion by the end of FY25 after managing to secure $1.77bn during the week ending July 4 — a development aimed at sending a strong signal to market stability. According to SBP data released on Thursday, the central bank’s reserves rose primarily on the back of official inflows, though no specific breakdown was provided. Bankers said the SBP purchased over $8bn from the interbank market during FY25, supported by record-high remittances of $38.3bn. These inflows were primarily driven by incentives offered to banks on transactions from overseas Pakistanis. However, the government is now considering scrapping these incentives, though no final decision has been made.