Pakistan forex reserves climb to $21bn after Eurobond proceeds

Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by more than $3 billion, taking the central bank’s reserves to $21.389 billion, according to data released by the central bank.

The SBP said the increase was primarily due to the receipt of proceeds from Pakistan’s Eurobond issuance.

With the reserves held by commercial banks included, the country’s total liquid foreign exchange reserves stood at $26.791 billion.

Commercial banks held $5.402 billion in foreign exchange reserves, according to the SBP data.

The sharp increase in the central bank’s reserves comes as Pakistan seeks to strengthen its external position and build a larger foreign exchange buffer following a period of pressure on the country’s external account.

The latest accumulation also provides a substantial boost to the central bank’s reserve position, with the Eurobond proceeds adding to its liquid foreign exchange holdings.

Meanwhile, the State Bank issued a clarification regarding reports circulating about the withdrawal of the Rs10 banknote, terming the reports baseless. The central bank urged the public not to pay heed to rumours regarding the discontinuation of the denomination. 

According to the SBP, a proposal concerning the introduction of new-design banknotes is currently under consideration by the federal cabinet. However, no decision has so far been taken to replace or discontinue banknotes of any denomination. The central bank said any decision regarding the issuance of new-design notes or withdrawal of existing banknotes would be formally communicated to the public.

The clarification followed reports circulating on social media and other platforms suggesting that the Rs10 note could be withdrawn from circulation.