SBP expects reserves to rebound as $2.4 billion inflows arrive before fiscal year-end
KARACHI: Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) declined by $1.305 billion during the week ended June 19, 2026, mainly due to external debt repayments, the central bank said on Monday.
According to official data released by the SBP, the country’s foreign exchange reserves decreased to $15.916 billion from $17.221 billion recorded a week earlier.
The decline reflects scheduled external debt servicing obligations, which continue to exert pressure on Pakistan’s foreign currency holdings despite improvements in the broader external sector.
Total Reserves Stand Above $21 Billion
The SBP reported that Pakistan’s total liquid foreign exchange reserves stood at $21.484 billion during the week under review.
Of the total reserves, the central bank held $15.916 billion, while commercial banks maintained net foreign exchange reserves of $5.568 billion.
The latest figures indicate a temporary setback in reserve accumulation as debt repayments offset recent gains from external inflows and improvements in the current account position.
Debt Repayments Behind Decline
The central bank attributed the decrease primarily to repayments of external debt obligations, which reduced reserve levels during the reporting week.
Pakistan has continued to meet its international debt commitments while managing external financing requirements through a combination of multilateral support, commercial financing arrangements and bilateral assistance.
Economists note that debt servicing remains one of the key factors influencing short-term fluctuations in the country’s reserve position.
SBP Expects Strong Inflows by June-End
Despite the decline, the SBP expressed confidence that reserves will recover before the close of the fiscal year.
The central bank said it expects approximately $700 million in inflows from multilateral institutions, along with around $1.7 billion through the refinancing of a government commercial loan.
These inflows, amounting to nearly $2.4 billion, are expected to be reflected in the SBP’s foreign exchange reserves by June 30, 2026.
According to the central bank, the anticipated inflows should help restore reserves to levels seen earlier in the month and strengthen Pakistan’s external account position.
Outlook for Reserves
The SBP has projected that its foreign exchange reserves will reach around $18 billion by the end of fiscal year 2025-26, supported by external financing arrangements and improved balance-of-payments management.
Analysts said reserve adequacy remains a crucial indicator of economic stability, helping maintain investor confidence and ensuring the country can meet its external financing needs.
With substantial inflows expected before the end of June, market participants will closely monitor reserve levels as Pakistan enters the new fiscal year with a focus on strengthening external sector resilience.
