SBP Bought Over $5 Billion From Interbank to Keep Rupee Stable Against Dollar

State Bank of Pakistan (SBP) has so far purchased over $5 billion from the interbank market during the current fiscal year.

This has kept forex reserves stable at $8 billion and also contributed to keeping the Pakistani Rupee at Rs. 278/$, reported Express Tribune.

With this level of intervention, the central bank tried to prevent reserves from falling below $3 billion due to a lack of foreign loans. While the exact size of purchases is undisclosed, greenback buyouts exceed $5 billion and are still ongoing. Critics opine that this has led to an undervalued rupee and made inflation worse. They propose allowing the PKR to appreciate which could ease inflation and interest rates.

Authorities reportedly defend SBP’s actions as best to avoid a repeat of past reserve crises.

Notably, SBP’s dollar purchases have supported foreign exchange reserves but remain insufficient to cover imports for more than 1.4 months.

Also, the intervention is in direct contradiction with Pakistan’s market-based exchange rate system adopted in 2019. The current exchange rate overvalues the PKR and is unsustainable given the country’s trade deficit.

While authorities claim the Real Effective Exchange Rate (REER) indicates the rupee is not undervalued, experts disagree. Some experts are advocating for strengthening the rupee up to 20 percent to address economic challenges effectively.

Follow ProPakistani on Google News & scroll through your favourite content faster!

Support independent journalism

If you want to join us in our mission to share independent, global journalism to the world, we’d love to have you on our side. If you can, please support us on a monthly basis. It takes less than a minute to set up, and you can rest assured that you’re making a big impact every single month in support of open, independent journalism. Thank you.


  • Critics opine that an undervalued $ has led to inflation? Really?? Please speak to someone other than those who benefit from a more expensive $.

  • Yes and at 22% interest rates… But of course you fail to mention this…. Touts….


  • Get Alerts

    Follow ProPakistani to get latest news and updates.


    ProPakistani Community

    Join the groups below to get latest news and updates.



    >