Pakistan’s forex reserves with SBP reach $14.51bn in FY25, exceeding IMF’s target

KARACHI: Pakistan’s central bank foreign exchange reserves increased by $5.12 billion to $14.51 billion as of June 30, 2025, the end of its fiscal year, the State Bank of Pakistan said on Wednesday, surpassing the International Monetary Fund’s $13.9 billion target.

The SBP’s reserves stood at $9.39 billion as of June 30, 2024.

The increase in foreign exchange reserves reflects a noticeable improvement in the country’s current account balance and realisation of planned inflows during the year, the SBP said in the statement.

The central bank did not provide a reason for the significant increase in reserves of more than $5 billion in the fiscal year 2025. But according to the statement released last week, it received commercial loans of $3.10 billion and multilateral loans totaling over $500 million.

The SBP’s reserves had fallen by $2.66 billion as of June 20, the second biggest weekly drop on record, due to external debt repayments.

According to media reports, China rolled over $3.4 billion in loans to Pakistan over the weekend, helping to increase the nation’s forex reserves, which the IMF requires. Beijing refinanced a $1.3 billion commercial loan that Islamabad had repaid two months prior, and it also rolled over $2.1 billion that had been in the SBP’s reserves for the previous three years.

“With this level of SBP’s reserves, the country has met the IMF condition set for the central bank reserves above $13.9 billion set for June 30, 2025. This is the highest weekly increase,” said Awais Ashraf, the director of research at AKD Securities Limited.

The SBP’s reserves are enough to cover 2.5 months of imports, Ashraf said.

“We expect reserves to surpass $17 billion by June 2026 due to strong remittances and a reduction in interest payments,” he added.

Two years ago, Pakistan’s foreign exchange reserves fell to extremely low levels, providing less than a month’s worth of import cover. The government obtained a $3 billion short-term IMF bailout in response to the prospect of a sovereign debt default. In addition, the government restricted imports and permitted more exchange rate flexibility.

The rise in forex reserves reflects improved external account management, higher remittances, better exports, and disciplined policy actions under the IMF’s guidance, Mohammad Sohail, the CEO of Topline Securities, wrote on X.

The SBP bolstered its reserves by purchasing dollars from the market. Between June 2024 and March 2025, it bought $6.8 billion from the interbank market, indicating the availability of foreign exchange in the system.