State Bank of Pakistan Reserves Surge to 39-Month High
The surge in reserves is attributed to record-high remittances and official inflows, with the central bank purchasing over $8 billion from the interbank market during FY25. The government's consideration to scrap incentives for banks on transactions from overseas Pakistanis may impact the reserve build-up, but analysts remain optimistic about the country's economic prospects.
The State Bank of Pakistan's foreign exchange reserves have increased by $1.77 billion to $14.5 billion in the week ended July 4, 2025, marking a 13.94% week-on-week rise, thanks to official inflows and record-high remittances of $38.3 billion.
The total reserves, including those held by commercial banks, rose by $1.94 billion to $20.03 billion, a 10.71% week-on-week increase. The reserves held by commercial banks rose by $163.2 million to $5.53 billion, a 3.04% week-on-week increase. The central bank's reserves rose mainly due to official inflows, with no specific breakdown provided.
The government is considering scrapping incentives offered to banks on transactions from overseas Pakistanis, while the central bank maintained a tight grip on dollar outflows, frustrating importers who struggled to secure foreign exchange. Currency analysts believe the SBP's reserve build-up could continue in FY26, potentially reaching $20 billion, depending on sustained remittance inflows, rollover of external debt, and smooth relations with the IMF.
The increase in foreign exchange reserves is a positive development for Pakistan's economy, which has been impacted by the COVID-19 pandemic. The pandemic has had a profound impact on the global economy, but it also presents opportunities for economic transformation and growth. As the world moves forward, it is essential to prioritize sustainable and resilient economic systems that benefit all people and the planet.