Pakistan’s foreign exchange reserves inched upward again, rising by $11 million during the week ending August 8, according to the State Bank of Pakistan (SBP). The central bank’s holdings now stand at $14.243 billion, while commercial banks hold $5.254 billion, bringing the nation’s total liquid forex reserves to approximately $19.497 billion.
Forex Reserves Rebuilding Amid Economic Pressures
This uptick comes after a turbulent period in which reserves plunged to critically low levels below $4 billion in mid-2023, sparking default fears. Since then, structural reforms, IMF support, and enhanced remittance inflows have steadily stabilized the situation.
The current reserve level of nearly $19.5 billion provides about two months of import cover, a noteworthy improvement that signals enhanced external resilience, even as debt servicing continues to weigh on Pakistan’s financial outlook.
Week in Review & Policy Impact
The prior week saw a temporary $72 million drawdown, reflecting external payment pressures and backlog servicing. The current gain suggests a modest but welcome rebound, attributed primarily to improved inflows rather than new borrowing.
Concurrently, the Pakistani rupee strengthened for the fourth week in a row, closing at 282.06 against the US dollar. This was partly driven by SBP’s liquidity support, with Rs 12 trillion injected through reverse repo operations to stabilize the interbank market.
Forex Reserves And Way Ahead
The steady build-up of Pakistan’s foreign exchange reserves, even at a gradual pace, is reinforcing investor confidence and strengthening the country’s credibility with bilateral lenders. This enhanced liquidity not only secures the nation’s ability to pay for essential imports such as oil and machinery but also supports overall economic stability.
Meanwhile, consistent remittance inflows, improved monetary interventions, and diplomatic efforts are proving effective, particularly when combined with IMF-backed reforms, highlighting policy wins that contribute to Pakistan’s improving financial resilience.