Foreign exchange reserves held by the State Bank of Pakistan (SBP) witnessed a significant increase of $852 million on a weekly basis, clocking in at $7.75 billion as of December 22, data released on Thursday showed.

Total liquid foreign reserves held by the country stood at $12.85 billion. Net foreign reserves held by commercial banks stood at $5.1 billion.

The SBP attributed the surge in the reserves to official government inflows.

"During the week ended on 22-Dec-2023, SBP’s reserves increased by $852 million to $7,757.1 million mainly due to receipt of official GoP inflows," it said.

Last week, Pakistan’s central bank reserves had decreased by $136 million to fall below $7 billion after over five months.

The SBP reserves held by the central bank had earlier got a boost in July when Pakistan received the first tranche of around $1.2 billion from the International Monetary Fund (IMF) after the lender approved a new $3-billion Stand-By Arrangement (SBA). It also got inflows from Saudi Arabia and the UAE.

However, the reserves have remained under pressure due to debt repayments, rise in import payments after easing restrictions, and a lack of fresh inflows.

In a major breakthrough, the IMF announced last month that its staff and Pakistani authorities had reached an agreement on the first review of the SBA.

The staff-level agreement is subject to approval by the IMF Executive Board, which is scheduled to meet on January 11.

“The IMF team has reached a staff-level agreement (SLA) with the Pakistani authorities on the first review of their stabilisation program supported by the IMF’s US$3 billion (SDR2,250 million) SBA,” the IMF said in its press release then.

“The agreement is subject to approval of the IMF’s Executive Board. Upon approval around US$700 million (SDR 528 million) will become available bringing total disbursements under the program to almost US$1.9 billion,” it added.

The expected inflow from the IMF will also help increase the SBP reserves.