SBP’s Dollar Purchases From Interbank Market Near $10 Billion in 16 Months: 2026 Analysis

The State Bank of Pakistan (SBP) has emerged as a major buyer of foreign currency in the domestic interbank market over the past 16 months, purchasing nearly $10 billion worth of dollars between June 2024 and September 2025. According to official data released by the central bank, SBP bought a net $9.7 billion during this period, highlighting its active role in stabilizing Pakistan’s foreign exchange market.

As Pakistan enters 2026, this aggressive dollar buying strategy is being closely analyzed by economists, investors, and policymakers because it reflects the country’s evolving monetary policy, foreign reserve management, and exchange rate strategy.

What Does SBP’s Dollar Buying Mean?

SBP’s dollar purchases represent foreign exchange intervention in the interbank market. This intervention includes:

• Outright dollar purchases
• Swap-based foreign exchange transactions
• Net difference between buying and selling dollars

The goal of such intervention is usually to:

• Build foreign exchange reserves
• Reduce excessive volatility in the rupee
• Improve market confidence
• Manage external payment pressures

SBP’s data shows that the central bank was a consistent net buyer of dollars throughout most of the 16-month period.

Monthly Breakdown of SBP Dollar Purchases (2024–2025)

A detailed monthly breakdown highlights how SBP’s buying activity evolved over time.

Dollar Purchases in 2024

• June 2024: $573 million
• July 2024: $722 million
• August 2024: $569 million
• September 2024: $946 million
• October 2024: $1.03 billion
• November 2024: $1.15 billion
• December 2024: $536 million

Buying accelerated sharply in October and November 2024, reflecting improving inflows and stronger market conditions.

Dollar Purchases in 2025

• January 2025: $154 million
• February 2025: $223 million
• March 2025: $860 million
• April 2025: $473 million
• May 2025: $522 million
• June 2025: $502 million
• July 2025: $189 million
• August 2025: $257 million
• September 2025: $1.02 billion

The largest monthly purchase in the latter period was recorded in September 2025, when SBP bought over $1 billion in a single month.

---

Why Did SBP Buy So Many Dollars?

Several factors explain why SBP aggressively purchased dollars during this period.

1. Strengthening Foreign Exchange Reserves

Pakistan has historically faced low reserve levels. SBP used favorable inflow periods to rebuild reserves, reducing vulnerability to external shocks.

2. IMF Program Discipline

Under IMF-supported programs, Pakistan is required to:

• Maintain adequate reserves
• Ensure exchange rate stability
• Avoid disorderly market movements

SBP’s actions align with IMF-backed macroeconomic discipline.

3. Improved Inflows

Dollar inflows improved due to:

• Bilateral financing
• Multilateral loans
• Export receipts
• Worker remittances

These inflows provided SBP room to purchase dollars without destabilizing the market.

What Is Net FX Intervention?

Net FX intervention refers to:

Outright and swap purchases of foreign exchange minus outright and swap sales conducted by SBP with commercial banks.

This measure provides a clearer picture of SBP’s actual dollar accumulation rather than gross activity.

During the 16-month period, SBP remained a net buyer, meaning it bought more dollars than it sold.

Impact on Pakistan’s Foreign Exchange Reserves

Despite heavy dollar buying, SBP’s foreign exchange reserves showed mixed movement, according to data compiled by Arif Habib Limited.

Reserve Performance Highlights

• September 2024: Reserves rose to $10.74 billion after a sharp $1.3 billion increase
• November 2024: Reserves increased further to $12.03 billion
• April 2025: Reserves fell to $10.28 billion due to repayments and outflows

However, a strong rebound followed.

Major Reserve Rebound in Mid-2025

A significant turnaround occurred in May and June 2025, when SBP reserves:

• Jumped by a combined $4.23 billion
• Reached $14.5 billion

This rebound was attributed to:

• External financing
• Rollovers of deposits
• Improved current account position

Reserve Position Toward End-2025

After some moderation in July, August, and September 2025, SBP reserves stood at:

• $14.2 billion at end-September 2025

Later data shows further improvement.

Latest Reserve Position (2026 Context)

• As of December 19, 2025:
  👉 SBP reserves increased to $15.9 billion

This is one of the strongest reserve positions Pakistan has seen in recent years.

How SBP’s Dollar Buying Affects the Rupee

SBP’s intervention has helped:

• Reduce sharp rupee fluctuations
• Prevent panic-driven depreciation
• Improve investor confidence
• Support market stability

Instead of defending a fixed rate, SBP followed a managed market approach, allowing the rupee to adjust while preventing extreme volatility.

Does Dollar Buying Mean Artificial Support?

Some analysts argue that heavy intervention can distort markets. However, SBP maintains that:

• Intervention was opportunistic, not defensive
• Purchases were made during periods of inflow
• No fixed exchange rate target was pursued

This approach is considered more sustainable going into 2026.

Comparison With Past Years

Compared to earlier years:

• Reserve accumulation in 2024–25 was stronger
• Exchange rate volatility was lower
• Market confidence improved

This marks a shift from crisis management to stabilization mode.

What This Means for Pakistan’s Economy in 2026

As Pakistan enters 2026, SBP’s stronger reserve position offers several advantages:

• Better capacity to handle external shocks
• Improved credit outlook
• Reduced pressure on imports
• Stronger negotiating position with lenders

However, challenges remain, including:

• Debt repayments
• Energy import costs
• Global interest rate uncertainty

Expert Views on SBP’s Strategy

Economists generally view SBP’s dollar buying as:

• Prudent reserve management
• A sign of improved macro stability
• A buffer against future uncertainty

They caution that structural reforms remain essential to sustain gains.

Conclusion: SBP’s Dollar Purchases Signal Stability Going Into 2026

SBP’s purchase of nearly $10 billion from the interbank market in 16 months represents a significant shift in Pakistan’s foreign exchange dynamics. By rebuilding reserves, managing volatility, and leveraging improved inflows, SBP has strengthened Pakistan’s financial position as the country moves into 2026.

While challenges persist, the data suggests a more stable external sector compared to previous years, provided fiscal and structural reforms continue.

Frequently Asked Questions (FAQs)