The State Bank of Pakistan (SBP) significantly stepped up its presence in the foreign exchange market in September 2025, purchasing approximately USD 1 billion from the interbank market. The move signals a marked increase in central bank intervention amid improving external inflows and strengthening balance of payments dynamics. The latest purchase reflects growing confidence in Pakistan’s external position as inflows stabilize and market liquidity improves.
With this acquisition, the SBP’s total net foreign exchange intervention over the past year, spanning from October 2024 to September 2025, has reached USD 6.9 billion. This sustained buying trend highlights the central bank’s efforts to rebuild foreign exchange buffers after a period of pressure on external accounts. Market participants view the accumulation as a positive indicator of improved macroeconomic management and greater stability in the foreign exchange market.
Despite the sizable dollar purchases during September, the SBP also successfully met its external repayment obligations during the same month. Notably, Pakistan repaid a USD 500 million international bond in September 2025, underscoring the central bank’s capacity to balance reserve accumulation with timely debt servicing. Analysts say this dual achievement reflects enhanced cash flow management and improved confidence among external stakeholders.
The SBP had earlier indicated during its post–Monetary Policy Committee analyst briefing that foreign exchange purchases were stepped up from September 2025 onwards. According to the central bank, the increase in market intervention was driven by stronger balance of payments conditions, improved liquidity in the interbank market, and higher availability of foreign currency inflows. These developments allowed the SBP to actively rebuild reserves without creating undue volatility in the exchange rate.
Pakistan’s overall liquid foreign exchange reserves have shown steady improvement in recent months. As of December 19, 2025, the country’s total liquid foreign reserves stood at USD 21.023 billion. Of this amount, foreign exchange reserves held by the SBP were recorded at USD 15.903 billion, while net foreign reserves held by commercial banks amounted to USD 5.120 billion. The rising reserve levels provide a stronger buffer against external shocks and help support exchange rate stability.
The improvement in reserves comes at a time when Pakistan’s external sector is benefiting from a combination of factors, including controlled imports, gradual recovery in exports, steady workers’ remittances, and improved confidence following policy reforms. The SBP’s ability to actively participate in the foreign exchange market without disrupting normal trading conditions is seen as a sign of healthier market depth and improved sentiment.
Economists note that continued reserve accumulation, alongside disciplined monetary and fiscal policies, will be critical for maintaining stability in the months ahead. While challenges remain on the external front, the recent pickup in SBP’s foreign exchange purchases suggests that near-term risks have eased. With reserves strengthening and debt obligations being met on schedule, Pakistan’s external outlook appears more stable as the country moves into the next phase of economic recovery.
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