Pakistan’s foreign currency deposits recorded a marginal monthly decline in January 2026, reflecting a sharper drop in non-resident holdings even as resident deposits remained broadly stable. According to the latest data released by the State Bank of Pakistan, total foreign currency deposits fell by $42.67 million, or 0.61%, to $6.92 billion compared to the previous month.
Despite the month-on-month dip, the overall trend remains positive on a yearly basis. Foreign currency deposits were 3.3% higher compared to January 2025, indicating gradual growth in foreign currency holdings over the past twelve months.
A breakdown of the figures shows that foreign currency deposits held by residents stood at $6.02 billion in January 2026, slightly lower by 0.13% compared to $6.03 billion recorded in December 2025. On a year-on-year basis, resident deposits posted a 2.7% increase, suggesting that domestic account holders have maintained relatively steady foreign currency balances over the past year.
In contrast, non-resident deposits experienced a more notable decline during the month. These deposits fell to $899 million in January 2026, down by $34.65 million or 3.71% from $933.72 million in December 2025. The sharper contraction in non-resident holdings was the primary factor behind the overall monthly decrease in total foreign currency deposits.
The composition of resident deposits during January reveals a diversified structure. Of the $6.02 billion total, $2.08 billion was held in demand deposits, $1.94 billion in savings deposits, and $2.00 billion in time deposits. Non-resident deposits were distributed as $615 million in demand deposits, $206 million in savings deposits, and $78 million in time deposits.
Foreign currency deposits play a significant role in supporting Pakistan’s fiscal and external financing requirements, particularly in managing trade-related obligations and current account pressures. During the month under review, $803.81 million was utilized for pre-shipment financing, while $141.47 million was allocated for post-shipment financing. Additionally, $1.16 billion was used to finance imports, underscoring the continued reliance on foreign currency liquidity to facilitate trade flows.
Beyond trade financing, a substantial portion of the deposits was placed within the banking system and with the central bank. A total of $1.35 billion was placed with the State Bank of Pakistan and other Pakistani banks. Of this amount, $390.42 million was maintained under Cash Reserve Requirement (CRR) obligations, while $717.65 million was held under Special Cash Reserve Requirement (SCRR) requirements. Furthermore, $17.34 million was placed with banks within Pakistan, and $226.64 million was deposited with banks outside the country.
In addition to institutional placements, $648.79 million was held as balances abroad, while $234.91 million remained as cash in hand. These allocations reflect the varied channels through which foreign currency deposits are managed to meet regulatory requirements, liquidity needs, and trade financing demands.
While the monthly dip may indicate short-term adjustments, the year-on-year growth suggests relative stability in foreign currency holdings. The sharper fall in non-resident deposits, however, will be closely observed in the coming months as policymakers and market participants assess external account dynamics and capital flow trends.
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