State Bank-held forex reserves rise by $230 million in a week

KARACHI: Pakistan’s foreign exchange reserves continued to rise in the week ending May 2, 2025, with the State Bank of Pakistan (SBP) reporting an increase of $118.1 million, or 1.16 per cent, bringing its total holdings to $10.33 billion.  

This follows a smaller rise of $9 million a week earlier, signalling a gradual recovery after a sharp decline in April.

The two-week upward trend comes after reserves had fallen by $367 million earlier last month, hitting a seven-month low. Since then, the SBP’s reserves have grown by a combined $127 million. 

Total foreign reserves, including those held by commercial banks, also saw a notable increase of $230.8 million, reaching $15.48 billion. Commercial bank holdings alone rose by $112.7 million to stand at $5.15 billion. 

So far in the fiscal year, SBP reserves have grown by $943 million — an increase of just over 10 per cent. However, when measured from the start of the calendar year, reserves are still down by $1.38 billion, or nearly 12 per cent. 

While the SBP has not provided details on the source of recent inflows, the upward movement suggests some stability is returning after months of pressure due to external debt repayments and delayed foreign assistance. 

The country is expecting a $1 billion disbursement from the International Monetary Fund (IMF) under a $7 billion bailout programme. The IMF board is scheduled to review Pakistan’s progress on Friday, which could unlock the next tranche. 

In its latest monetary policy statement, the SBP said the surplus in the current account — driven by higher remittances and its own dollar purchases from the open market — has helped replenish reserves and offset some of the impact from large debt repayments. 

The central bank expects the current account to remain in surplus for the rest of the fiscal year. However, it also acknowledged that net financial inflows have remained weak up to March, mostly due to delays in official funding and heavy debt servicing. 

Despite these challenges, the SBP forecasts that reserves could reach $14 billion by June 2025, assuming the anticipated inflows materialise. It further expects the reserve buildup to continue into the next fiscal year, supported by a manageable current account deficit and improved external financing. 

However, the SBP warned that this outlook remains vulnerable to global economic uncertainties, including potential shifts in trade and investment flows. 

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