SBP reserves fall $72m on debt repayments
The foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by $72 million, reaching $14.23 billion, primarily due to scheduled external debt repayments, according to data released by the central bank on Thursday.
Meanwhile, the net foreign exchange reserves held by commercial banks remained stable at $5.26 billion, bringing the country's total liquid foreign reserves to $19.50 billion. Moreover, the Pakistani rupee posted a marginal gain against the US dollar, appreciating by 0.04% in the inter-bank market. By the end of trading, the local currency closed at 282.56, marking an improvement of Rs0.11 from the previous day's close at 282.67.
On the global front, the US dollar weakened against major currencies amid growing expectations of interest rate cuts by the Federal Reserve and concerns over increasing political influence in key American institutions. The US labour market remains under focus, particularly after last week's disappointing non-farm payroll data, which contributed to the dollar's decline. At the same time, the euro gained ground ahead of scheduled peace talks next week aimed at resolving the ongoing Russia-Ukraine conflict.
Meanwhile, gold prices in Pakistan surged, tracking a sharp uptrend in the international market where the yellow metal climbed to a more than two-week high. The global rally was fueled by safe-haven demand after US President Donald Trump's latest tariffs took effect and soft jobs data strengthened expectations of interest rate cut. In the local market, the gold price per tola rose by Rs2,900 to settle at Rs362,200, while 10-gram gold was priced at Rs310,528, reflecting a day-on-day increase of Rs2,487, according to the All Pakistan Sarafa Gems and Jewellers Association.
The increase follows Wednesday's uptick of Rs1,300, when the per-tola price reached Rs359,300. Interactive Commodities Director Adnan Agar attributed the continued volatility to "the intensifying global tariff war." The international market hit a high of $3,397 and was standing at $3,385, with a low of $3,365. "If gold closes above $3,400, the next target could be around $3,440-50," he noted.
"As long as tariff tension continues – whether it's with India, Russia, Europe or Japan – we expect gold to remain volatile. There's strong fluctuation in prices and the trend could persist for the next few months," Agar added.
Globally, spot gold gained 0.6% to $3,388.09 per ounce as of 0956 am ET (1356 GMT), after hitting its highest level since July 23 earlier in the session. US gold futures added nearly 0.7% to $3,455.60, according to Reuters.
Furthermore, China's central bank added gold to its reserves in July, its ninth consecutive month of purchases, official data showed on Thursday.
China's gold reserves rose to 73.96 million fine troy ounces at the end of July from 73.90 million ounces at the end of June. The country's gold reserves were valued at $243.99 billion at the end of last month, up from $242.93 billion at the end of June, data from the People's Bank of China showed.
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