SBP Purchases Over $20B in Three Years to Maintain Forex Market Stability

The State Bank of Pakistan (SBP) has decided to keep the policy rate unchanged at 11%, in line with market expectations. The decision came after the Monetary Policy Committee (MPC) meeting held on October 27, 2025, where officials reviewed the country’s latest economic indicators, inflation trends, and external financing position.

The central bank emphasized that its current focus remains on maintaining price stability, managing inflation expectations, and supporting foreign exchange stability.

$20 Billion Purchased to Support the Rupee

In its post-meeting briefing, the SBP revealed that it has purchased over $20 billion from the foreign exchange market during the past three years. These purchases were made to strengthen Pakistan’s reserves, stabilize the rupee, and meet external debt repayment obligations.

According to SBP officials, the dollar purchases came after covering foreign loan repayments and profit repatriations, allowing the bank to build a healthier reserve buffer. The reserves are seen as essential for ensuring market confidence, meeting import needs, and managing future economic shocks.

Analysts say that such active management has helped Pakistan avoid volatility in the currency market and restore investor confidence amid global economic uncertainty.

Economic Outlook Improving

The SBP noted that the impact of recent floods on agriculture and infrastructure is now less severe than expected, leading to a more positive economic outlook. The central bank projects GDP growth for FY26 in the upper half of the 3.25% – 4.25% range, an upgrade from earlier estimates.

Officials said that improving agricultural output, higher remittance inflows, and strong export performance are helping stabilize Pakistan’s growth momentum.

IMF Program on Track

The SBP Governor confirmed that Pakistan has met all criteria for the next IMF review, which is scheduled for December 2025. The approval of a $1.2 billion tranche will further strengthen foreign reserves and create additional space for fiscal reforms.

So far, Pakistan has repaid $3.1 billion out of a total $10 billion due for FY26, reflecting better debt management. The government also expects remittances to exceed $41 billion in FY26, providing strong support for the external sector.

Economists say that consistent inflows from overseas Pakistanis, combined with SBP’s cautious approach, have created a more sustainable external financing position.

Inflation to Ease in FY27

While the SBP acknowledged that inflation may temporarily exceed the target range during the second half of FY26, it expects prices to ease by FY27. The decline will depend on improved agricultural supply, energy price stability, and a steady exchange rate.

The central bank also warned that global oil price hikes or supply disruptions could create short-term inflationary pressure. However, it assured that import levels remain manageable and that the government is coordinating with relevant agencies to protect consumers from price shocks.

Building Confidence Through Prudent Policy

Financial analysts believe that SBP’s approach combining steady interest rates, foreign exchange interventions, and tight liquidity control is helping restore confidence in Pakistan’s economy.

The bank’s proactive stance on dollar purchases ensures exchange-rate stability, while maintaining a balance between growth and inflation control.

Experts note that stability in the rupee and reserves also improves Pakistan’s credit outlook, attracts foreign investment, and reassures the business community.

Focus on Sustainable Growth

The SBP’s strategy now focuses on maintaining macroeconomic discipline, promoting exports, and reducing import dependence. Officials believe that steady policy measures will create a foundation for sustainable economic growth over the coming years.

By supporting a stable rupee and adequate reserves, the SBP aims to shield Pakistan from external shocks and enhance resilience against global financial volatility.

Conclusion

The State Bank of Pakistan’s dollar-buying program exceeding $20 billion in three years marks one of the most significant interventions in the country’s recent financial history.

By maintaining a stable policy rate, meeting IMF requirements, and ensuring a balanced external position, the SBP continues to demonstrate its commitment to economic recovery and investor confidence.

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