KARACHI – Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) declined by $1.305 billion during week ended June 19 as the country made heavy external debt repayments, underscoring the continued pressure of debt servicing on its external account despite expected inflows later this month.
The decline pushed SBP’s foreign exchange reserves down to $15.916 billion, compared with $17.221 billion a week earlier, highlighting the continued pressure of debt servicing on the country’s external account.
Despite weekly drop, Pakistan’s overall liquid foreign exchange reserves remained at $21.484 billion as of June 19. The SBP accounted for $15.916 billion of the total, while commercial banks held $5.568 billion in net foreign reserves.
The central bank linked decline primarily to scheduled external debt repayments but expressed confidence that the reserve position would improve before the close of the fiscal year.
SBP said the foreign exchange reserves are expected to receive a significant boost through $700 million in inflows from multilateral financial institutions, alongside nearly $1.7 billion through the refinancing of a government commercial loan. These inflows are expected to be reflected in the reserve figures by June 30.
Despite temporary erosion in reserves, the SBP has maintained its projection of ending FY2025-26 with approximately $18 billion in foreign exchange reserves, indicating that the anticipated external financing is expected to offset the recent decline.
The latest numbers show persistent challenge of balancing debt obligations with reserve accumulation, even as Pakistan relies on fresh external financing to strengthen its foreign exchange position.
The total public debt reached Rs80.5 trillion by the end of June 2025, including Rs54.5 trillion in domestic debt and Rs26 trillion in external debt. Ministry of Finance said public debt stood at 70.7% of GDP, while Pakistan’s total external debt and liabilities amounted to around $138 billion, of which approximately $92 billion was external public debt.
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