State Bank Bought $27 Billion from Market in Three Years: Malik Muhammad Bostan

KARACHI (09-09-2026): Chairman of the Exchange Companies Association of Pakistan (ECAP), Malik Muhammad Bostan, has said that the State Bank of Pakistan purchased $27 billion from the market during the past three years, which is a very substantial amount. He said that had the State Bank not purchased these dollars, the exchange rate of the US dollar would have fallen below Rs200, and these purchases have prevented the dollar from declining further.
Malik Muhammad Bostan said that the interbank market is not operating as a completely free market. In the interbank market, currency buying and selling can take place according to demand and supply. However, he explained that a genuine free-float system means that if a person has Rs100,000 in his bank account and needs dollars, he should be able to instruct his bank to convert his Pakistani currency into dollars at the prevailing interbank exchange rate.
He said this is what a free-float system means, but Pakistani banks often tell customers that they do not have dollars available. If customers purchase dollars from the market and deposit them into their accounts, the banks are then willing to provide the conversion facility.
“This is neither completely free float nor completely controlled—it is something in between,” Bostan remarked.
He said that a genuine free-float system could only be afforded when Pakistan’s foreign exchange reserves reach around $70 billion. At present, he added, the country’s foreign exchange reserves are too low to sustain a completely free-floating exchange rate regime.
Malik Bostan said that political instability in the country has contributed to the economic crisis, while the weakness of the economy is also discouraging investment. He stressed that political forces in Pakistan should engage in dialogue.
“If political forces cannot sit together and hold talks now, then when will they?” he asked, adding that the entire nation wants all political parties to set aside their differences and adopt the path of negotiations.
He further said that Pakistan played an important role in efforts to secure a ceasefire in the Iran-US conflict. He attributed a significant role in these efforts to Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, saying that their efforts had helped project a positive image of Pakistan internationally.
He said the international community is currently appreciating Pakistan’s efforts for peace.
“We say that when Pakistan’s leadership can bring the United States and Iran to the negotiating table, why can it not facilitate dialogue among political forces within the country?” Bostan asked.
He emphasized that the door to economic success opens through positive politics, adding that political stability is essential for economic stability.
“People will not invest in the country until the economy achieves stability,” he said.
Expressing concern over the country’s declining savings rate, Bostan said that national savings have currently fallen to only 6.4 percent. He also pointed out that farmers often do not receive payments for their produce on time, creating additional financial difficulties for the agricultural sector.
Malik Bostan also highlighted Pakistan’s vulnerability to floods and climate change. He said that because of the shortage of dams in Pakistan, large quantities of water are wasted, while floods cause extensive damage to crops and populated areas and sweep away livestock.
He said farmers are often unable to protect their crops from devastating floods, while glaciers are also bursting every year, increasing the country’s vulnerability to climate-related disasters.
“Pakistan will face serious challenges in the coming years because of climate change, but unfortunately, we have not made adequate preparations,” he said.
Bostan proposed that major dams should be constructed at intervals of around 100 kilometres in areas through which floodwaters pass and cause destruction. Alternatively, he said, a network of smaller dams could be developed to store floodwater.
He stressed that water storage infrastructure is essential not only to reduce flood damage but also to preserve valuable water resources for agriculture and other economic needs.