SBP forex reserves fall to $15.9 billion after external debt payments

Pakistan's official foreign exchange reserves declined sharply during the week ended June 19 after external debt repayments reduced the State Bank of Pakistan's (SBP) holdings by more than $1.3 billion, although the central bank expects the shortfall to be largely offset before the end of the month.

In its latest weekly reserve update released on Monday, the SBP said its foreign exchange reserves fell by $1.305 billion to $15.916 billion, compared with $17.221 billion recorded a week earlier. The central bank attributed the decline to repayments against the country's external debt obligations.

The SBP, however, said the reserve position is expected to strengthen with incoming government inflows totalling about $2.4 billion. These include $0.7 billion from multilateral institutions and roughly $1.7 billion through the refinancing of a government commercial loan, both of which are scheduled to be reflected in the central bank's reserve position as of June 30.

As of June 19, Pakistan's total liquid foreign exchange reserves stood at $21.484 billion. The SBP held $15.916 billion of the total, while net foreign exchange reserves maintained by commercial banks amounted to $5.568 billion.

The central bank has retained its forecast that official foreign exchange reserves will reach approximately $18 billion by the close of fiscal year 2025-26.