The State Bank of Pakistan (SBP) purchased approximately $7.3 billion from the interbank foreign exchange market during the first 11 months of fiscal year 2026, slightly above the $7.2 billion acquired during the corresponding period a year earlier.

The continued dollar purchases reflect the central bank’s efforts to manage foreign exchange liquidity while strengthening Pakistan’s external reserves.

Rather than allowing excess foreign currency inflows to remain entirely within the market, the SBP has been absorbing part of the available liquidity to reinforce the country’s external buffers.

Key Takeaways

• SBP purchases: $7.3 billion
• Period: First 11 months of FY26
• Previous-year purchases: $7.2 billion
• Market: Interbank foreign exchange market
• Main objective: Absorb excess FX liquidity
• Additional objective: Build foreign exchange reserves
• Key inflows: Remittances and other non-debt foreign exchange receipts
• Broader impact: Supports external buffers and debt-servicing capacity

SBP Purchases Slightly More Dollars Than Last Year

SBP’s dollar purchases increased modestly from $7.2 billion to $7.3 billion compared with the same period of FY25.

The figures indicate that the central bank has continued to remain active in the foreign exchange market even as broader external conditions have improved.

The purchases provide the SBP with an opportunity to accumulate foreign currency when market conditions and inflows allow.

Managing Foreign Exchange Liquidity

One of the key purposes of the purchases is to absorb excess foreign exchange liquidity from the interbank market.

When foreign currency inflows rise, central bank purchases can help prevent excessive accumulation of dollars in the market while allowing the SBP to increase its own reserve holdings.

This approach can also help manage volatility in the exchange market.

Building Pakistan’s External Reserves

The acquired dollars contribute to strengthening Pakistan’s foreign exchange reserves, providing an important external buffer for the economy.

Higher reserve holdings can improve the country’s ability to meet international payment obligations, including external debt-servicing requirements.

The accumulation of reserves has become particularly important as Pakistan works to strengthen its external position.

Remittances Support Dollar Inflows

Improved workers’ remittance flows have contributed to stronger foreign exchange availability in the market.

Alongside other non-debt foreign currency inflows, these receipts have provided the SBP with greater scope to purchase dollars without placing significant pressure on the exchange rate.

The strategy allows the central bank to capture part of these inflows for reserve accumulation.

Supporting Exchange Rate Stability

The SBP’s market activity also forms part of its broader foreign exchange management strategy.

By purchasing dollars when market conditions permit, the central bank can increase reserves while seeking to avoid unnecessary disruption to exchange-rate stability.

The sustained purchases suggest that reserve accumulation remains an important priority for Pakistan’s monetary authorities.

Why This Matters

• SBP purchased $7.3 billion from the interbank market during the first 11 months of FY26.
• Purchases were slightly higher than the $7.2 billion recorded during the same period last year.
• The central bank is using market purchases to absorb excess FX liquidity.
• The strategy supports foreign exchange reserve accumulation.
• Improved remittance and other non-debt inflows have helped create room for dollar purchases.
• Stronger reserves provide an important buffer for external payments and debt servicing.
• Continued intervention also aims to maintain greater stability in the foreign exchange market.

Frequently Asked Questions

How much did SBP purchase from the interbank market in FY26?

The State Bank of Pakistan purchased approximately $7.3 billion from the interbank foreign exchange market during the first 11 months of FY26.

How does this compare with last year?

SBP purchased around $7.2 billion during the same period of the previous fiscal year, meaning purchases were slightly higher this year.

Why does SBP buy dollars from the interbank market?

The purchases help the central bank absorb excess foreign exchange liquidity and build its reserves, while also supporting orderly conditions in the currency market.

Where do the dollars available in the market come from?

Foreign exchange can enter Pakistan through sources including workers’ remittances, exports and other non-debt inflows.

How do these purchases affect Pakistan’s reserves?

When SBP purchases foreign currency, those holdings can contribute to the country’s official foreign exchange reserves, strengthening its external financial buffer.

Do SBP dollar purchases affect the rupee?

Central bank intervention can influence foreign exchange market liquidity and help manage volatility. The SBP’s approach is generally aimed at maintaining orderly market conditions rather than targeting a specific exchange rate.