Pakistan’s foreign exchange reserves have surged dramatically to $19.87 billion, marking a historic turnaround in the country’s external economic position. Just two years ago, Pakistan struggled to cover even a few weeks of import and export payments, but recent data from the State Bank of Pakistan (SBP) reveals substantial improvement driven by increased inflows and enhanced political stability.
The SBP’s foreign exchange reserves rose sharply to $14.51 billion, reflecting a year-on-year increase of 54.5% or $5.12 billion compared to $9.39 billion the previous year. This significant rise is attributed to fresh inflows, including $3.1 billion in commercial loans and over $500 million from multilateral institutions realized during the last week of June 2025, underscoring progress in stabilizing the external account and improving the current account balance.
Foreign Exchange Reserves Growth Supports Pakistan’s Currency and Economic Stability
During the week ending June 27, 2025, the SBP’s reserves increased by $3.66 billion, climbing to $12.73 billion from $9.06 billion reported the previous week, offsetting a $2.66 billion drop caused by external debt repayments the prior week. Commercial banks held an additional $5.36 billion, bringing total liquid reserves to $19.87 billion. This resurgence reflects Pakistan’s successful fiscal reforms and stabilization measures aimed at strengthening the external sector.
The sharp rise in foreign exchange reserves is expected to bolster the Pakistani rupee’s stability, improve import cover, and enhance the country’s negotiating position with international lenders, promoting overall economic resilience.
Related: Decisive Hold: SBP Policy Rate Decision Signals Confidence in Pakistan’s Economic Recovery
Pakistani Rupee Shows Signs of Strength Amid Rising Reserves
The Pakistani rupee demonstrated modest appreciation against the US dollar in the interbank market, gaining 0.03% to close at 283.86, up by 9 paisas from the previous day. This slight strengthening reflects growing confidence in the country’s improving external position and economic outlook.
Domestic Gold Prices Rise Despite Global Market Volatility
Despite a 1% decline in the international gold market triggered by stronger-than-expected US payroll data, Pakistan’s domestic gold prices increased. The price of 24-karat gold per tola rose by Rs800 to Rs357,000, while the 10-gram price climbed by Rs685 to Rs306,069, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).
Global gold traded within a range of $3,311 to $3,363 per ounce, with key support levels between $3,310 and $3,300, as noted by Adnan Agar, Director at Interactive Commodities. Agar cautioned that a breach below this support could push prices toward $3,250. Due to the upcoming US bank holiday, trading volumes are expected to remain subdued until the market resumes full activity.
Pakistan’s Economic Outlook Brightens with Foreign Exchange Strength and Market Stability
The remarkable recovery in Pakistan’s foreign exchange reserves and currency stability signals a positive shift in the country’s economic trajectory. Sustained inflows, fiscal discipline, and political steadiness are driving renewed investor confidence and market resilience, positioning Pakistan for stronger economic growth and improved financial stability in the months ahead.
