In a significant boost to Pakistan’s economic outlook, the State Bank of Pakistan (SBP) has reported that its foreign exchange reserves surged by $5.12 billion in the last fiscal year (FY25), reaching a total of $14.51 billion by June 30, 2025. This figure not only marks a major recovery in the country’s external sector but also surpasses the International Monetary Fund’s (IMF) target of $13.9 billion, signaling renewed confidence in Pakistan’s macroeconomic management.
According to provisional data released on Wednesday, the reserves held by SBP climbed from $9.39 billion in June 2024 to $14.51 billion in June 2025—a robust year-on-year increase that reflects improved economic fundamentals and successful financial planning by the federal government and central bank.
The sharp increase in reserves is largely attributed to strong foreign inflows in the final weeks of the fiscal year. These included $3.1 billion in commercial loans received on behalf of the Government of Pakistan, as well as over $500 million in multilateral funding. The inflows played a critical role in stabilizing Pakistan’s foreign exchange position, which had come under pressure due to earlier external debt repayments.
Notably, the week ending June 20, 2025, saw a sharp decline in SBP reserves by $2.657 billion—dropping to $9.064 billion—largely due to heavy debt servicing, including repayments on commercial loans. Despite this temporary dip, SBP’s strategic management and coordination with the federal government helped restore reserves quickly and decisively.
SBP Governor Jameel Ahmed had projected earlier this year that the reserves would cross the $14 billion mark by the end of FY25, even as the country grappled with large-scale external debt repayments. His forecast has now materialized, and the reserves not only recovered but exceeded expectations.
Economists and market analysts are hailing the development as a turning point. They attribute the rise to multiple factors including disciplined fiscal management, an improving current account, higher inflows of remittances from overseas Pakistanis, and adherence to IMF-backed economic reforms.
Muhammad Sohail, CEO of Topline Securities, called the development a “major achievement,” crediting the combined efforts of SBP and the federal government. “This is a clear sign of improved external account management and a step forward toward long-term macroeconomic stability,” he said. He also noted that rising exports, remittance growth, and strong policy implementation were instrumental in reaching this milestone.
The strong reserve position is expected to further stabilize the currency, bolster investor confidence, and support Pakistan’s ongoing efforts to ensure sustainable economic growth. With reserves now above the critical threshold set by international lenders, the country is in a better position to manage external shocks, negotiate future financing terms, and maintain momentum toward structural reforms.
While challenges such as inflation, fiscal pressures, and debt repayments remain, the latest surge in foreign reserves reflects Pakistan’s capacity to navigate economic turbulence through focused policies, timely inflows, and strategic international engagement.
