KARACHI: The State Bank of Pakistan’s (SBP) foreign exchange reserves rose further by $131 million to $11.418 billion during the week ended on Nov 22, announced the central bank on Thursday.

With the beginning of FY25, the SBP reserves have been increasing each month reflecting both the inflows and dollar buying by the central bank from the currency market.

The details showed that the SBP’s reserves were increased to $9.43bn in August from $9.22bn in July, $10.73 in September and $11.203bn in October.

Currency market experts said the higher remittances and export proceeds would allow the central bank to buy more dollars from the currency market, which will further improve its reserves to timely meet external debt repayment obligations.

Sources in the financial industry said the government is still struggling to secure debt rollover from China, Saudi Arabia and the UAE.

Recently, the finance minister hinted that these friendly countries were not ready to roll over the cumulative $14bn debt.

Experts said this could be a turning point for the economy as the country is not in position to pay this $14bn during the FY25. They said it will drastically hit the external account of the economy and the surplus current account could see a steep rise in deficit.

The financial sector was expecting a possible shock in case of ‘no’ from the three countries over the issue of rollover.

Some said the remittances would remain high due to higher exports of human resources. More than a million people left Pakistan in 2023.

The State Bank reported the country’s total reserves during the week were $16.076bn including $4.657bn of commercial banks. The country’s total slightly improved while commercial banks shed some reserves.

Published in Dawn, November 29th, 2024