Karachi, January 30, 2025 – Pakistan’s foreign exchange (forex) reserves saw a decline of $137 million during the week ending January 24, 2025, primarily due to external debt repayments and other foreign payments. This drop reflects the country’s ongoing financial obligations amid efforts to stabilize the economy.
According to the latest data released by the State Bank of Pakistan (SBP), the total forex reserves of the country fell to $16.052 billion, down from $16.189 billion recorded a week earlier on January 17, 2025. The reduction underscores the persistent external payment pressures Pakistan faces as it navigates economic challenges.
Breakdown of Forex Reserves Decline
The forex reserves held by the SBP experienced a drop of $77 million, bringing the total to $11.372 billion as of January 24, 2025, compared to $11.449 billion in the previous week. The central bank attributed this decrease to government payments for external debt servicing, which remains a key factor influencing the nation’s forex reserves position.
In addition to the central bank’s holdings, the forex reserves maintained by commercial banks also recorded a decline. The reserves held by private banks decreased by $60 million, settling at $4.68 billion, down from $4.74 billion a week earlier. This reduction further contributed to the overall dip in Pakistan’s forex reserves.
Economic Implications and Future Outlook
The continuous depletion of forex reserves raises concerns over Pakistan’s ability to meet future external debt obligations and maintain currency stability. Economists suggest that while remittances, exports, and foreign inflows could help offset some of the losses, the government must remain proactive in securing financial assistance and investment to bolster reserves.
Moving forward, Pakistan’s forex reserves will be closely monitored by investors and policymakers, as any further declines could impact import capacity, exchange rates, and overall economic stability. The government is expected to explore options such as negotiating foreign loans, securing IMF tranches, and attracting foreign direct investment (FDI) to replenish the country’s reserves.
As Pakistan continues to manage its external financial commitments, the trajectory of forex reserves will play a crucial role in shaping economic policies and market sentiment in the coming months.