Pakistan’s Foreign Exchange Reserves Exceed $20 Billion After Three Years

Fueled by robust foreign capital inflows, Pakistan’s total liquid foreign exchange reserves have surpassed the $20 billion milestone for the first time in three years, marking a significant advancement for the nation’s external financial position.

According to the State Bank of Pakistan’s (SBP) latest weekly report issued on Thursday, the country’s aggregate liquid foreign exchange reserves saw an increase of $1.94 billion over the preceding week. As of July 4, 2025, Pakistan’s total liquid reserves reached $20.029 billion, a notable rise from the $18.09 billion recorded on June 27, 2025. This resurgence marks the first instance in more than three years that reserves have exceeded the $20 billion mark.

Previously, Pakistan’s foreign exchange reserves touched $21.439 billion on March 18, 2022, before experiencing a sharp contraction to $18.55 billion just a week later on March 25, 2022. Since that decline, reserves had remained below the $20 billion threshold.

However, boosted by substantial foreign capital inflows, the nation’s total liquid reserves, encompassing those held by the SBP and commercial banks, have once again exceeded $20 billion in the initial week of July 2025.

During the week under review, the SBP’s foreign exchange reserves expanded by $1.774 billion, attributed to official inflows from international financial institutions. Following this surge, the reserves held by the SBP reached $14.502 billion as of July 4, 2025, compared to $12.729 billion as of June 27, 2025.

Additionally, the net foreign reserves held by commercial banks also demonstrated an upward trend, growing by $163.2 million to reach $5.526 billion a week earlier.

Cumulatively, the SBP’s foreign exchange reserves augmented by $5.12 billion to $14.51 billion by the close of the last fiscal year (FY25), surpassing the IMF’s target of $13.9 billion. This upswing aligned with the forecast made by SBP Governor Jameel Ahmad, who projected in January that despite substantial external debt repayments, the central bank’s reserves would exceed $14 billion by the end of FY25.

Leading up to the close of the last fiscal year, the SBP also secured $3.1 billion in commercial loans on behalf of the Government of Pakistan, in conjunction with over $500 million in multilateral funding, substantially elevating the country’s foreign exchange reserves to a three-year peak.

Economists suggest that Pakistan’s external account has demonstrated strong performance, supported by increased remittances and a significant augmentation in foreign exchange reserves. Pakistan effectively managed its external debt obligations during the last fiscal year while simultaneously enhancing its foreign reserves.