KARACHI: Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) have surged to their highest level in nearly four years, following a major inflow from the International Monetary Fund, offering fresh optimism about the country’s external economic position.
According to official data released by the central bank on Thursday, SBP reserves increased by $1.3 billion in a single week to reach $15.89 billion as of December 12, 2025. The sharp rise came after Pakistan received a $1.2 billion tranche from the IMF under the Extended Fund Facility and the Resilience and Sustainability Facility programmes.
This marks the highest level of SBP-held foreign exchange reserves since March 11, 2022, when reserves last remained above the $15 billion mark. The latest figures represent a significant recovery from February 2023, when Pakistan’s reserves had fallen to a critically low level of around $2.9 billion, triggering concerns over external financing and import coverage.
In addition to the central bank’s holdings, Pakistan’s total liquid foreign exchange reserves stood at $21.09 billion during the same week. Of this, commercial banks held reserves amounting to $5.20 billion, reflecting an overall improvement in the country’s foreign currency position.
The IMF disbursement was approved last week by the Fund’s Executive Board, which cleared $1 billion under the EFF and an additional $200 million through the RSF. In its statement, the IMF acknowledged Pakistan’s progress in stabilising the economy despite global challenges and recent climate-related shocks.
The IMF noted that Pakistan’s fiscal performance has remained strong, with a primary surplus of 1.3% of GDP achieved in fiscal year 2025, in line with programme targets. While inflation has risen due to flood-related disruptions in food supply, the Fund said the impact is expected to be temporary. It also highlighted that gross reserves stood at $14.5 billion at the end of FY25, compared to $9.4 billion a year earlier, and are projected to continue improving in FY26.
The State Bank of Pakistan, in its latest Monetary Policy Statement, said it had surpassed its December 2025 reserve target of $15.5 billion despite ongoing external debt repayments. The central bank acknowledged pressure on exports, mainly due to a decline in food exports such as rice, and noted that net external financing inflows remained modest.
However, the SBP said continued foreign exchange purchases by the central bank helped offset these pressures. Looking ahead, it warned that global trade uncertainties could weigh on exports, although lower international oil prices may help contain import growth.
The SBP projected that Pakistan’s current account deficit will remain within 0 to 1% of GDP in FY26. With the expected inflow of planned official financing, the central bank anticipates that its foreign exchange reserves could rise further to $17.8 billion by June 2026, strengthening Pakistan’s economic outlook and boosting market confidence.
