SBP Bought $27 Billion in 3.5 Years to Build Forex Reserves
Pakistan’s central bank has been aggressively buying dollars from the market, and the scale is bigger than many expected.
The State Bank of Pakistan (SBP) has purchased around $27 billion from the currency market over the past three-and-a-half years to strengthen the country’s foreign exchange reserves and manage external financing pressures.
The disclosure highlights how heavily Pakistan has relied on market interventions to rebuild reserves during a period marked by debt repayments, IMF negotiations, and currency volatility.
Why SBP Bought So Many Dollars
The main objective was reserve accumulation.
Pakistan’s foreign exchange reserves had fallen sharply during the economic crisis, putting pressure on:
- The rupee
- Import payments
- External debt obligations
To stabilize the situation, the SBP began regularly purchasing dollars from the interbank market whenever inflows improved.
These interventions helped rebuild reserves despite:
- Large debt repayments
- Oil import pressures
- Slow foreign investment inflows
How Big the Purchases Really Were
The numbers are significant.
- Around $27 billion was purchased in 3.5 years
- Roughly $7–8 billion was bought in the last 12 months alone
- Monthly interventions at times crossed $1 billion
This made the SBP one of the largest buyers in Pakistan’s foreign exchange market during this period.
How It Helped Pakistan
The strategy played a major role in rebuilding reserves.
Pakistan’s reserves, which had dropped to critically low levels during the crisis, have now improved to around $15–16 billion according to recent SBP data.
The central bank expects reserves to rise further toward:
- $18 billion by June 2026
- Above $20 billion later in the year
But There’s a Catch
The policy has also faced criticism.
Some business groups argue that heavy dollar buying:
- Keeps pressure on the rupee
- Prevents faster currency appreciation
- Makes imports more expensive than they otherwise would be
Economists have also pointed out that reserve growth driven mainly by market purchases is different from reserve growth driven by strong exports or foreign investment.
Why This Matters Right Now
The timing is important.
Pakistan is still:
- Managing large external repayments
- Operating under an IMF programme
- Facing uncertainty from rising oil prices and regional tensions
That means maintaining healthy reserves remains critical for economic stability.
What Happens Next
The SBP is expected to continue buying dollars whenever market conditions allow.
However, future reserve growth will also depend on:
- Remittances
- IMF inflows
- External financing support
- Oil price trends
If global pressures increase again, reserve management could become more difficult.
Bottom Line
The SBP’s $27 billion intervention shows how actively Pakistan’s central bank has worked to stabilize the economy over the past few years.
The strategy helped rebuild reserves and reduce immediate pressure on the external account, but it also reflects how dependent the economy still is on careful currency management and external inflows.
