The foreign exchange reserves held by the State Bank of Pakistan (SBP) saw a modest increase of $34.9 million, or 0.31%, during the week ending on February 14, 2025, bringing the total reserves to $11.2 billion. This data, released by the SBP on Thursday, reflects a continued stabilization in the country’s foreign reserves, a crucial indicator of the nation’s financial health.
Alongside the rise in SBP reserves, the country’s overall reserves also witnessed an increase. The total reserves surged by $85.3 million, or 0.54%, to reach $15.95 billion during the same week. This growth in reserves is reflective of an overall positive trend in the country’s foreign exchange position, which is vital for ensuring the country’s ability to meet its external obligations.
The commercial banks operating in Pakistan also contributed to the positive movement in reserves. The reserves held by commercial banks rose by $50.4 million, or 1.07%, bringing the total held by commercial banks to $4.75 billion. This indicates a healthy buildup in the banking sector’s foreign currency reserves, which can help support trade and finance import needs in the country.
Over the course of the current fiscal year, SBP-held reserves have seen a remarkable increase of $1.81 billion, or 19.3%. This rise reflects efforts to stabilize Pakistan’s foreign exchange reserves and manage its external liabilities. However, despite this upward trend, the reserves have experienced a decline of $509 million, or a 4.35% decrease, during the current calendar year, suggesting some volatility in the short term.
The monthly data from the SBP for January 2025 also sheds light on the trends in foreign exchange reserves. As of January 31, 2025, SBP’s reserves stood at $11.418 billion, showing a decrease of $313.4 million from the $11.732 billion recorded at the end of December 2024. Despite this monthly decline, SBP’s reserves have grown significantly compared to the same period last year. The reserves have increased by $3.25 billion, or 40%, compared to January 2024, when they stood at $8.162 billion.
In contrast, the reserves held by commercial banks in January 2025 showed a slight decline. Commercial banks’ net foreign reserves stood at $4.18 billion, down by $15.2 million from $4.19 billion in December 2024. However, when compared to January 2024, when commercial banks held $4.43 billion, the reserves have decreased by $251.9 million, signaling some pressure on the banking sector’s foreign currency position.
The total liquid foreign reserves in the country at the end of January 2025 were recorded at $15.59 billion, showing a decrease of $328.6 million from $15.93 billion at the end of December 2024. Despite this decline, the year-on-year comparison reveals a positive trend, with Pakistan’s total reserves increasing by $3 billion, or 23.86%, compared to January 2024.
The rise in SBP reserves during the week ending February 14, 2025, highlights the ongoing efforts to bolster Pakistan’s foreign exchange position. The increase in both SBP-held reserves and commercial bank reserves demonstrates a combined effort to stabilize the country’s economy and mitigate external financial pressures. These developments will be crucial for managing the country’s import needs and servicing external debt in the coming months, while also providing a buffer against potential economic shocks.
As Pakistan continues to navigate its economic recovery, the growth in foreign reserves provides a much-needed boost to investor confidence and signals progress toward stabilizing the country’s macroeconomic environment.