Karachi, March 27, 2025 – Pakistan’s net foreign exchange reserves have dropped by $465 million within a week, as per the latest data released by the State Bank of Pakistan (SBP) on Thursday.
The decline in reserves highlights continued external debt repayments and financial pressures on the economy.
According to SBP, the country’s total liquid reserves stood at $15.551 billion as of March 21, 2025, compared to $16.016 billion recorded on March 14, 2025. This marks a significant decline, primarily driven by external debt servicing and other financial obligations.
SBP Reserves Face Pressure
The official reserves held by SBP witnessed a sharp drop of $540 million, bringing them down to $10.607 billion by the end of the reported week. In contrast, a week earlier, SBP’s reserves were at $11.147 billion. The central bank cited large-scale external debt repayments as the key reason for this decline, underscoring Pakistan’s continued reliance on foreign borrowing to meet its financial commitments.
Despite the dip in reserves, SBP remains hopeful of an improvement in the coming weeks. A substantial inflow is expected as Pakistan awaits a disbursement from the International Monetary Fund (IMF) under its loan program. The IMF recently announced that it had reached a staff-level agreement with Pakistani authorities, paving the way for additional financial assistance that could bolster the country’s reserves.
Commercial Banks’ Reserves Show Improvement
While SBP’s official reserves took a hit, the foreign exchange reserves held by commercial banks saw an increase of $75 million. These reserves reached $4.944 billion by March 21, 2025, compared to $4.869 billion a week earlier. This increase suggests a marginal improvement in liquidity within the banking sector, though the overall reserves situation remains fragile.
Outlook for Pakistan’s Reserves
Economic analysts warn that Pakistan’s reserves remain under pressure due to ongoing external debt repayments, trade imbalances, and fluctuating foreign inflows. However, expected disbursements from IMF and friendly nations may provide some relief to SBP’s reserves in the coming weeks. Until then, Pakistan must adopt strategic measures to manage external obligations while ensuring economic stability.