Pakistan’s foreign exchange reserves drop $540m on debt repayments

• Commercial banks’ net foreign reserves were reported at $4.94bn.
• Despite the dip, SBP’s reserves remain above crucial $10bn mark.
• Forex reserves are sufficient to cover imports for over two months.

Pakistan’s liquid foreign exchange reserves retreated to $15.55 billion as of March 21, 2025 — a significant drop in the central bank’s holdings owing to external debt servicing, the State Bank of Pakistan (SBP) reported on Thursday.

The SBP-held foreign reserves fell by $540 million during the week, settling at $10.61 billion. The fall was attributed to debt obligations.

Meanwhile, commercial banks’ net foreign reserves were reported at $4.94 billion.

Despite the dip, SBP’s reserves remain above the crucial $10 billion mark, providing an import cover of over two months.

Analysts say that upcoming inflows, including expected multilateral and bilateral financing, could help stabilise the reserves in the coming weeks.

International Monetary Fund (IMF) staff reached a deal with Pakistan for a new $1.3 billion arrangement and also agreed on the first review of the ongoing 37-month bailout programme, the Fund said on Tuesday.

Pending board approval, Pakistan can unlock the $1.3 billion under a new climate resilience loan program spanning 28 months.

It will also free $1 billion for the South Asian nation under its $7 billion bailout program, which would bring those disbursements to $2 billion.

The programme, secured mid-year in 2024, has played a key role in stabilizing Pakistan’s economy, and the government has said the country is on course for a long-term recovery.

“Over the past 18 months, Pakistan has made significant progress in restoring macroeconomic stability and rebuilding confidence despite a challenging global environment,” the IMF said in a statement.

“Upon approval (by the IMF board), Pakistan will have access to about $1 billion under the EFF, bringing total disbursements under the program to about $2 billion,” the IMF said.

The Ministry of Finance says the country’s $350 billion economy has stabilised under a $7 billion IMF bailout that had helped it stave off a default threat.

Pakistan continues to navigate external financing challenges, with policymakers focused on securing foreign inflows to maintain reserve buffers and support economic stability.