Islamabad: Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) have soared to $14.51 billion by the end of fiscal year 2025 (June 30, 2025), marking a substantial increase of $5.12 billion from $9.39 billion a year earlier. This significant rise reflects a noticeable improvement in the country’s current account balance and the realization of planned inflows during the year, according to provisional data released by the central bank.
This achievement is a major milestone for Pakistan, as the new figure exceeds the International Monetary Fund’s (IMF) June 2025 reserves target under Pakistan’s ongoing $7 billion Extended Fund Facility (EFF). It signifies a remarkable turnaround in the country’s external account after years of balance-of-payments stress, reaching its highest level since early 2018.
The increase has also pushed Pakistan’s import cover – a crucial indicator of external sector strength – to 2.5 months, a notable improvement from 1.7 months a year ago and less than one month during the 2022-23 crisis period.
The surge in reserves is primarily attributed to a combination of factors:
Improved Current Account Balance: Pakistan achieved a historic current account surplus of $1.9 billion during July-April FY2025, a significant turnaround from a deficit of $1.3 billion in the same period last year. This was driven by a robust increase in remittances and improved exports, including growth in IT services.
Realization of Planned Inflows: The SBP successfully managed to secure substantial foreign inflows. This included a rollover of $3.4 billion in loans from China (with $2.1 billion already in SBP reserves and $1.3 billion in refinanced commercial loans), an additional $1 billion from Middle Eastern commercial banks, and $500 million from multilateral financing.
