State Bank of Pakistan Reserves Rise to $11.516 Billion
The increase in foreign reserves is a positive development, but the SBP still faces significant challenges in meeting its target, including a substantial shortfall and high debt servicing requirements, which may impact the country's economic stability.
Pakistan's total liquid foreign reserves stood at $16.636 billion as of May 23, with the State Bank of Pakistan's reserves increasing by $70 million to $11.516 billion during the week ended on May 23, bringing the country's total reserves to a notable level.
The net foreign reserves held by commercial banks were $5.120 billion, contributing to the overall total. The State Bank of Pakistan made a net foreign exchange purchase of $223 million in February 2025, a $69 million increase from the previous month's purchase of $154 million. This significant purchase is part of the SBP's efforts to stabilize the country's foreign exchange market.
The total FX interventions by the SBP in the interbank FX market over the last nine months have reached $5.9 billion, demonstrating the central bank's active role in managing the country's foreign exchange reserves. The SBP aims to reach a target of $14 billion by the end of the fiscal year, but experts have raised concerns about the bank's ability to meet this goal, given the significant shortfall of $2.5 billion.
Pakistan is expected to receive $1.4 billion in climate funding from the IMF and has secured a $1 billion deal with the UAE, which may help alleviate some of the pressure on the country's foreign exchange reserves. However, the required amount for debt servicing is estimated to be over $5 billion, posing a significant challenge for the SBP to meet its target.