KARACHI: Pakistan’s foreign exchange reserves held by the central bank increased by $34 million to $14.336 billion during the week ending September 5, the State Bank of Pakistan (SBP) said on Thursday.
The country’s total liquid foreign reserves rose by $21 million to $19.681 billion. However, the reserves of commercial banks dropped by $12 million to $5.345 billion. The SBP’s reserves are enough to cover 2.63 months of imports. The reserves of the SBP increased for the fifth consecutive week; however, the bank did not specify the reasons for the ongoing rise in its reserves in the weekly statement. Overall, the improvement in the external account driven by strong remittances, coupled with continued foreign exchange purchases by the SBP, has contributed to the growth of its reserves.
Pakistan’s remittances from its overseas citizens increased 7.0 per cent to $6.4 billion in the first two months of the fiscal year 2025-26.Remittances stood at $3.1 billion in August, up 7.0 per cent from a year earlier. However, these inflows fell by 2.0 per cent, compared with the previous month.
According to the latest data issued by the SBP, Pakistan’s outstanding total external debt and liabilities increased to $134.97 billion as of June 30, 2025, compared with $131.04 billion in the previous year.
In FY25, the country’s external debt servicing increased, compared with the previous year, due to higher government repayments and a big jump in commercial bank loan maturities, while interest cost stayed almost the same. The total debt servicing payments amounted to $18.049 billion, up from $16.932 billion in FY24. Of this total, $5.338 billion was paid in interest, a decrease from $11.475 billion the previous year, while $12.711 billion was allocated for principal repayment, compared with $5.458 billion in FY24.
According to a report from Topline Securities, Pakistan’s external debt-to-GDP ratio remained unchanged in FY25, reaching a seven-year low. In US dollar terms, external public debt rose by 5.6 percent, while in Pakistani rupee terms, it increased by 7.6 per cent, both figures being lower than the nominal GDP growth of 8.2 per cent. “External debt servicing to FX reserves is 115 per cent for FY25. This ratio indicates external public debt repayments due in one year as a percentage of the country’s reserves. Notably, this is expected to further improve in FY26 as reserves are expected to improve in June 2026,” the report said.