SBP reserves fall to $10.57 billion; inflows expected before June

KARACHI: Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) fell by $127 million to $10.57 billion during the week ending April 11, mainly due to external debt repayments.

The country’s total liquid foreign reserves, which include holdings of commercial banks, dropped by $91 million to $15.66 billion. While the SBP’s reserves declined, commercial banks saw a modest increase of $36 million, taking their reserves to $5.09 billion.

Despite the outflows, the SBP expects a boost in reserves over the next few months. It anticipates foreign exchange inflows between $4 billion and $5 billion by the end of June, which could push the central bank’s reserves above $14 billion.

Looking ahead to the 2024–25 fiscal year, Pakistan faces total external debt repayments of around $26 billion. However, the SBP estimates that $16 billion of this amount will be rolled over or refinanced, leaving $10 billion in net repayments. Of that, $8 billion has already been settled.

Analysts say that Pakistan’s external position has improved compared to previous years. As a result, any delays in the International Monetary Fund’s (IMF) approval of the next $1 billion loan tranche under the current $7 billion programme are not expected to significantly disrupt the country’s macroeconomic stability, even if the delay lasts for several months.

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