The State Bank of Pakistan (SBP) has reportedly transferred a staggering Rs2.7 trillion to the government as a dividend payout for the fiscal year (FY) 2024-25. According to reports, this marks the largest-ever dividend payout by the SBP and comes amidst a 27 percent decline in the bank’s profit level.
Data released by the SBP reveals that profits fell to just Rs2.5 trillion for FY 2024-25, which indicates that the bank paid out more money than it earned to the federal government. As per the details, the SBP paid out Rs200 billion in addition to its total profit for FY 2024-25 to Islamabad.
The reason behind the decline in SBP’s profit is tied to the fall in the benchmark interest rate. Reports suggest that the SBP’s revenues have dropped significantly and could possibly fall further if the bank slashes interest rates again in upcoming monetary policy discussions.
According to reports, the SBP’s transfer to the federal government is 180 percent higher than in FY 2023-24. It merits a mention that the SBP’s financial performance remained exceptional during FY 2024-25, as the central bank successfully built up its reserves through its interventions in the currency market.
Data from reports indicates that the SBP’s holdings of foreign exchange jumped to a respectable $14.274 billion after it logged an increase of $18 million to its reserves last week. This allowed Pakistan’s liquid foreign reserves to balloon to $19.618 billion, after accounting for commercial bank reserves, which reportedly stand at $5.343 billion.
A leading domestic securities company outlined the improvement in the SBP’s position, highlighting how import cover now rests at 2.7 months after the jump in reserves. While this sits below the 3 months of import cover considered “adequate” by the SBP, the improvement is still a welcome relief for the economy.
The SBP was able to boost its reserves by heavily carrying out foreign exchange interventions, which reports suggest amount to $7.8 billion during the period June 2024 to May 2025. Details from reports suggest that the SBP has kept the rupee from appreciating because of its heavy dollar purchases to build reserves.
Another reason for the jump in reserves is linked to the increase in gold prices, which allowed the value of the SBP’s gold reserves to spike up to $6.8 billion in FY 2024-25. As per the data, SBP’s gold reserves recorded a 41 percent increase in value on a year-on-year basis.