SBP Governor Forecasts Increase in Foreign Exchange Reserves

State Bank of Pakistan (SBP) Governor Jameel Ahmad announced Wednesday that the central bank anticipates its foreign exchange (FX) reserves to increase by $3 billion, reaching $17.5 billion by the close of fiscal year 2025-26.

He stated that this growth is projected despite repayments of foreign debt, including rollovers, amounting to $25.9 billion in FY26.

Ahmad noted during the SBP monetary policy press conference that the FX reserves could potentially exceed the $17.5 billion target for FY26 if Pakistan secures new debt from the global capital market through Eurobond sales. The central bank has decided to maintain the key interest rate at 11%.

The FX reserves at the end of FY25, as of June 30, 2025, were recorded at $14.5 billion.

He also projected that Pakistan’s gross domestic product (GDP) would experience growth between 3.25% and 4.25% in FY26.

It is worth noting that the International Monetary Fund (IMF) has estimated Pakistan’s GDP growth at 3.6% for FY26.

The SBP governor stated that the anticipated growth would be supported by a recovery in agricultural output and ongoing improvements in the industrial and services sectors.

The current account deficit is expected to fall between 0-1% of GDP in FY26, marking the conclusion of the current account surplus seen in FY25.

The Monetary Policy Committee (MPC) of the SBP observed that year-on-year inflation is expected to largely remain within the 5–7 percent range in FY26, although it might surpass the upper limit in certain months.

The MPC highlighted that this outlook is subject to several risks stemming from volatile global commodity prices and trade prospects, unexpected adjustments in administered energy prices, and possible widespread flooding.