The State Bank of Pakistan (SBP) reported a weekly decline in its foreign exchange reserves, falling by $69 million to reach $14.456 billion for the week ending July 18, 2025. This marks a 0.50 percent drop compared to the previous week’s reserve level of $14.526 billion, as disclosed in the latest data issued by the central bank.
Despite this weekly dip, the broader picture remains largely positive. Since the beginning of the current fiscal year, SBP-held reserves have grown significantly, posting a gain of $5.39 billion. This represents a substantial 59.49 percent increase, reflecting successful reserve management and positive macroeconomic developments. From a calendar-year perspective, reserves have also climbed by $2.75 billion, showing a 23.45 percent increase over the past seven months.
Total liquid foreign currency reserves of the country, which include holdings by commercial banks, decreased slightly during the same period. As of July 18, 2025, total reserves stood at $19.917 billion, down $40 million from $19.957 billion recorded a week earlier. This reflects a modest 0.19 percent decrease in the nation’s overall reserve position.
Interestingly, while the SBP’s reserves declined, commercial banks registered a modest increase in their net foreign currency holdings. Bank-held reserves rose by $28 million during the week, reaching $5.461 billion. This represents a 0.59 percent increase and suggests continued liquidity strength in the private banking sector.
The week-on-week fluctuations in reserves are largely attributed to external debt repayments, trade-related payments, and other regular foreign exchange operations. However, analysts view the recent dip as part of normal reserve movement and not an immediate concern, especially in light of the strong fiscal-year gains.
SBP’s rising reserve levels over recent months have been supported by increased remittance inflows, enhanced current account management, foreign investments, and multilateral financial support. These factors have contributed to the overall strengthening of Pakistan’s external account position, even as global financial conditions remain uncertain.
The central bank continues to play a crucial role in ensuring monetary and external sector stability. Its interventions through open market operations, prudent interest rate policy, and currency management have contributed to maintaining investor confidence and exchange rate steadiness.
With reserves still near the $20 billion threshold, and SBP’s holdings showing year-to-date resilience, Pakistan’s economic authorities appear to be in a relatively strong position to manage external obligations and maintain macroeconomic stability. Future reserve trends will be closely monitored by analysts and markets, particularly in light of expected debt repayments, policy rate adjustments, and multilateral funding inflows.
The current reserve levels, despite this minor weekly decline, remain a testament to the improving fundamentals of Pakistan’s financial system and the central bank’s active role in navigating the country through external pressures.