SBP's foreign exchange reserves soar to $18.2 billion, highest since January 2017

The State Bank of Pakistan (SBP) on Wednesday said that it has received $1 billion inflows against issuance of the Eurobond, pushing its foreign exchange reserves to the highest level since January 2017.

In a tweet, the central bank said that it received $1 billion in proceeds of the government’s tap offering of its recently-issued Eurobond.

Accordingly, SBP’s foreign exchange reserves, as on July 13, reached $18.2 billion, which is the highest level since January 2017.

“A sizable improvement in the current account position, during the last fiscal year, also largely contributed to buildup the foreign exchange reserves."

Pakistan borrowed $300 million for 5 years at a 5.875% interest rate, $400 million bonds for 10-years at 7.125%, and $300 million for 30 years at an interest rate of 8.450%.

It was Pakistan’s second bond sale of the year, after raising $2.5 billion in March through Eurobonds. After a gap of over three years, Pakistan entered the international capital market for the sale of Eurobonds. However, the interest rates were slightly lower than the previous transaction.

Forex reserves cross $24bn mark

Days ago, SBP received $1 billion as loan disbursement from China and $440 million from the World Bank.

In the last week of March, Pakistan received around $500 million from the International Monetary Fund (IMF) as a loan tranche under Extended Fund Facility (EFF) for budget support.

During June-2021, Pakistan also received proceeds of Wapda Green Eurobond, amounting to $499.0 million. All these inflows helped build foreign exchange reserves.