State Bank of Pakistan Reserves Drop to $9 Billion
The SBP's foreign exchange reserves have dropped to a three-year low, but the central bank expects to regain ground with fresh inflows from international financial institutions. The country's total liquid foreign reserves stood at $14.4 billion as of June 20, 2025, and remittances are expected to exceed $38 billion in FY25.
The State Bank of Pakistan's (SBP) foreign exchange reserves have dropped by over $2.6 billion in a week, primarily due to hefty external debt repayments, falling to $9.065 billion as of June 20, 2025.
The decline in reserves is attributed to external debt repayments by the government, primarily for commercial borrowings. Despite the drop, analysts say Pakistan has successfully managed external debt servicing during this fiscal year. The country's total liquid foreign reserves fell by $2.6 billion, and the total liquid foreign exchange reserves held by the country stood at $14.4 billion as of June 20, 2025.
However, the SBP expects to regain ground as it has received over $3 billion in fresh inflows from international financial institutions. These inflows will be reflected in the reserves data next week. Remittances have continued to rise, with estimates suggesting that total remittance inflows for FY25 will exceed $38 billion.
The central bank has been actively buying dollars from the currency market, and Pakistan has received $3.6 billion in loans to boost its foreign exchange reserves. The loans are part of Pakistan's plan to borrow $19.9 billion in foreign economic assistance during the next fiscal year 2025-26.
The decline in reserves has raised concerns about Pakistan's ability to achieve its target of $14 billion for FY25. However, with the expected inflows and rising remittances, the country's foreign exchange reserves are expected to improve in the coming weeks.