Pakistan’s foreign exchange reserves recorded a sharp decline during the week ending June 19 after the country made scheduled external debt repayments. The Reserves dip reflects the ongoing impact of debt servicing on the country’s external financial position.
According to the State Bank of Pakistan (SBP), its foreign exchange reserves fell by $1.305 billion over the week. As a result, the central bank’s reserves dropped to $15.916 billion from $17.221 billion recorded a week earlier.
The Reserves dip was mainly caused by heavy external debt repayments made during the reporting period. The SBP said the decline was expected and linked directly to scheduled payments on foreign obligations.
Despite the weekly fall, Pakistan’s total liquid foreign exchange reserves remained at $21.484 billion as of June 19. Of this amount, the SBP held $15.916 billion, while commercial banks maintained net foreign exchange reserves of $5.568 billion.
The central bank remains optimistic that the reserve position will improve before the end of the fiscal year. Officials said upcoming external inflows are expected to strengthen the country’s foreign exchange holdings in the coming days.
According to the SBP, around $700 million is expected from multilateral financial institutions. In addition, nearly $1.7 billion is likely to come through the refinancing of a government commercial loan.
The central bank expects both inflows to be reflected in the official reserve figures by June 30. These funds are expected to offset the recent decline and provide support to Pakistan’s external account.
Despite the recent Reserves dip, the SBP has not changed its forecast for the current fiscal year. The central bank continues to expect foreign exchange reserves to reach around $18 billion by the close of FY2025-26.
The latest figures highlight the continued challenge of managing external debt while maintaining healthy reserve levels. Pakistan has relied on external financing to support its foreign exchange position and meet repayment obligations.
Debt servicing remains one of the biggest pressures on the country’s economy. Large repayments can reduce reserves quickly, even when future inflows are expected.
Meanwhile, official data shows Pakistan’s total public debt reached Rs80.5 trillion by the end of June 2025. Domestic debt accounted for Rs54.5 trillion, while external debt stood at Rs26 trillion.
The Ministry of Finance said public debt represented 70.7% of the country’s gross domestic product (GDP). It also reported that Pakistan’s total external debt and liabilities reached approximately $138 billion.
Out of the total external liabilities, nearly $92 billion consisted of external public debt. These figures underline the importance of maintaining stable foreign exchange reserves while meeting international financial commitments.
The latest reserve data shows that Pakistan continues to face pressure from debt repayments. However, expected foreign inflows may help improve the reserve position before the fiscal year concludes.
In other news read more about: Pakistan’s Forex Reserves Hit Highest Level Since March 2022
