KARACHI: Pakistan’s total foreign exchange reserves witnessed a decline of $184 million during the week ending April 25, 2025, according to the latest data released by the State Bank of Pakistan (SBP).
The country’s total foreign exchange reserves dropped to $15.252 billion from $15.436 billion recorded on April 18, 2025. This downward movement reflects ongoing pressures on Pakistan’s external account amid subdued inflows and consistent outflows.
Interestingly, the SBP’s official foreign exchange reserves saw a modest increase of $9 million during the week. As of April 25, 2025, the central bank’s reserves stood at $10.125 billion, up from $10.116 billion a week earlier. Despite this marginal improvement, the reserves remain below levels needed to cover three months of imports, considered a critical benchmark for economic stability.
Conversely, foreign exchange reserves held by commercial banks experienced a significant decline. These reserves dropped by $193 million, falling from $5.23 billion on April 18 to $5.037 billion by April 25. The sharp drop in commercial banks’ holdings contributed heavily to the overall fall in the country’s foreign exchange reserves.
Economists caution that this continued erosion in foreign exchange reserves could exacerbate Pakistan’s balance of payments challenges and weaken investor confidence. Sustained reserve depletion not only puts pressure on the local currency but also complicates debt repayments and financing of essential imports.
However, there is cautious optimism on the horizon. Pakistan is expecting inflows exceeding $1 billion from the International Monetary Fund (IMF) under the ongoing financial support program. These expected funds, if received promptly, could help stabilize the foreign exchange reserves and ease external sector vulnerabilities in the short term.
The government and SBP are also exploring additional avenues to bolster the country’s foreign exchange reserves, including bilateral and multilateral support and encouraging remittance inflows through formal banking channels.
