PAKISTAN’S total foreign exchange reserves rose to $16.04 billion by the end of January 2025 from $13.99bn in June 2024, according to the State Bank of Pakistan (SBP). This means that during the first seven months of this fiscal year, $2.05bn has been added to the reserves. However, the $11.42bn held by the SBP is still insufficient to cover three months of import bills.

The remaining reserves, around $4.63bn, belong to commercial banks.

The build-up in reserves became possible as the country continued borrowing from the International Monetary Fund and got its foreign debts owed to China, the United Arab Emirates, and Saudi Arabia rolled over. Last week, Saudi Arabia agreed to provide an estimated $1.2bn worth of oil on deferred payments.

Annualised consumer inflation in January sank to 2.4pc — the lowest reading in a decade — from 4.1pc in December and 12.6pc in June 2024, before the start of the new fiscal year in July. The central bank could potentially go for further interest rate easing now. It has already cut its key lending rate from 22pc in May 2024 to 12pc towards the end of January this year in six........

© Dawn Business