The State Bank of Pakistan (SBP) reported a modest increase in its foreign exchange reserves during the week ending August 29, 2025, providing some stability to the country’s external account position. According to data released on Thursday, SBP-held reserves rose by $28 million on a weekly basis, bringing the total to $14.30 billion.
The latest figures show that total liquid foreign reserves, including holdings by both the SBP and commercial banks, stood at $19.66 billion. Of this, net reserves held by commercial banks amounted to $5.36 billion. The central bank confirmed the movement in its weekly statement, noting, “During the week ended on 29-Aug-2025, SBP reserves increased by US$28 million to US$14,302.5 million.”
A week earlier, SBP’s reserves had stood at $14.27 billion, highlighting that the increase, though limited in scale, reflects a steady improvement in the country’s reserve position. For Pakistan, foreign exchange reserves serve as a critical buffer against external shocks, helping the country manage imports, service external debt, and stabilize the domestic currency against volatility.
Analysts view the uptick as a positive sign in the backdrop of Pakistan’s ongoing economic challenges. With persistent debt servicing obligations and reliance on multilateral and bilateral inflows, even modest gains in reserves can support market confidence. The recent stability of the rupee against the US dollar, which has shown incremental appreciation over the past several weeks, is partly attributed to consistent reserve management by the central bank.
Economists argue that Pakistan’s reserves remain vulnerable to global market fluctuations, commodity prices, and the pace of financial support from international lenders. Still, the latest data suggests that inflows from exports, remittances, and potential disbursements from external partners have been sufficient to maintain reserve levels above $14 billion.
This development comes at a time when Pakistan’s economic policymakers are focused on ensuring compliance with commitments made to the International Monetary Fund (IMF). Maintaining adequate reserves is one of the key indicators closely monitored by global lenders and investors, as it reflects the country’s ability to honor external liabilities and maintain macroeconomic stability.
The central bank has also been active in the domestic market, raising significant amounts through government securities. On Wednesday, the SBP mobilized Rs551.97 billion via auctions of Market Treasury Bills and Pakistan Investment Bonds. These measures not only provide liquidity management but also signal a cautious but steady approach to maintaining financial stability.
While the increase of $28 million may appear modest compared to the size of Pakistan’s external financing needs, experts highlight that sustained reserve buildup—no matter how incremental—remains critical for building resilience. Stronger reserves can help the country weather global uncertainties, absorb external account pressures, and provide confidence to both domestic and foreign investors.
The latest numbers underscore the delicate balancing act faced by policymakers: ensuring inflows remain consistent, managing outflows prudently, and aligning reserve levels with long-term macroeconomic goals. In the coming months, the trajectory of reserves will depend heavily on the pace of remittances, export growth, foreign direct investment, and financial commitments from international partners.
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