Pakistan’s FX reserves rise to $18.4bn in FY26

July 03, 2026 (MLN): Pakistan’s total foreign exchange reserves climbed to $18.4bn by the end of fiscal year 2025-26, marking an increase of approximately $5.5bn from $13bn recorded a year earlier, reflecting a significant improvement in the country’s external liquidity position.

During a media briefing in Karachi, State Bank of Pakistan (SBP) Governor Jameel Ahmad said the buildup in foreign exchange reserves has eased foreign currency liquidity constraints, facilitating the normalization of imports while ensuring the timely repayment of the country’s external debt obligations.

The governor noted that, excluding external debt repayments made during the year, Pakistan’s foreign exchange reserves would have reached nearly $23bn, highlighting the strength of external inflows.

He added that although the country’s total external debt has remained broadly unchanged at around $100bn since FY22, foreign exchange reserves have increased almost six-fold from nearly $3bn three years ago, significantly strengthening Pakistan’s external resilience.

The central bank also highlighted a sharp reduction in its forward foreign exchange liabilities. These obligations, which stood at nearly $5.8bn at the beginning of 2023, declined substantially to around $950m by the end of June 2026, falling below the $1bn mark.

Governor Jameel Ahmad said the improvement in the country's reserve position and the reduction in forward liabilities reflect strengthening external sector fundamentals and prudent reserve management by the central bank.

He further said Pakistan’s external sector has witnessed a remarkable turnaround over the past four years. The current account deficit narrowed from $17.5bn, or 4.7% of GDP, in FY22 to $3.3bn in FY23 and $2.1bn in FY24, before recording a $2.1bn surplus, equivalent to 0.5% of GDP, in FY25.

The current account also remained in surplus during the first eleven months of FY26 and is expected to close the fiscal year within the SBP’s target range of a surplus between 0% and 1% of GDP.

Commenting on the country's debt profile, the SBP governor said the government's external borrowing strategy has shifted away from short-term commercial financing toward long-term multilateral loans with maturities of 20 to 25 years, improving the overall debt maturity profile and reducing refinancing risks.

To further improve the quality of economic reporting, the SBP governor announced that the central bank will launch specialized capacity-building workshops for financial journalists.

The initiative aims to enhance journalists’ understanding of central bank policies, monetary developments, and key macroeconomic indicators, enabling more accurate, contextualized, and insightful financial reporting.

The SBP governor also said the central bank has communicated Pakistan's improved foreign exchange reserves and robust remittance performance to a credit rating agency, expressing confidence that these positive macroeconomic developments are expected to support an improved sovereign credit rating by S&P Global.

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