ISLAMABAD (Kashmir English): Pakistan’s foreign exchange reserves are presently at an all-time high since March 2022.
Pakistan’s forex reserves are recorded to be $21.1 billion, with an increase in the State Bank of Pakistan (SBP) reserves to $15.9 billion, which marks the highest in the past three years.
The reserves of commercial banks totaled $5.2 billion. Consequently, the import cover period accelerated to over 2.6 months as of the present data, compared to over two weeks reported in February 2023.
Unlike in other phases where accumulation has been seen in conjunction with external debt growth, in this era, there has been accumulation along with a lack of growth in external debt.
The period June 2015 to June 2022 has seen Pakistan’s external debt grow to $100 billion from $55 billion, yet SBP reserves went into decline during this time period, whereas since June 2022, the external debt has been stagnant, while the debt ratio has reduced from 31 percent to 26 percent in June 2025.
During this time, reserves built by SBP were approximately five and a half times, increasing from $2.9 billion to $15.9 billion, and forward foreign exchange liabilities were significantly reduced from $5.7 billion as of February 2023 to less than $2 billion, thus increasing the quality and use of reserve buffers.
According to economists, the pace of recovery is a function of increased discipline in policies, handling of foreign accounts, and less dependence on short-term loans.
The accumulation of reserves and the level of reserves to cover imports indicate a growing confidence level regarding the sustainability of Pakistan’s performance regarding overall macroeconomic stability, because it has been observed that the current cycle of performance does not symbolize a mere transient or debt-driven turnaround.
