Pakistan’s foreign exchange reserves reach highest level since March 2022

Pakistan’s foreign exchange reserves have reached their highest level since March 2022, a significant milestone for the national economy.

According to the latest data, Pakistan’s total foreign exchange reserves have risen to USD 21.1 billion, with USD 15.9 billion held by the State Bank of Pakistan (SBP).

The country’s import coverage has now exceeded 2.6 months, a notable improvement compared to just under two weeks in February 2023.

Economic analysts note that the increase in reserves is driven by domestic growth and confidence rather than external borrowing.

The ratio of external debt to GDP has declined from 31% to 26%, indicating a gradual reduction in reliance on foreign loans and reflecting financial discipline and reform measures.

The rise in reserves is not a result of temporary measures but demonstrates clear economic recovery.

In 2023, reserves had fallen to approximately USD 2.9 billion, but they have since increased to around USD 15.9 billion.

Compared to 2023, reserves have grown nearly 5.5 times, while forward foreign exchange liabilities have declined by approximately 65%, reducing future financial pressures.

Between 2015 and 2022, Pakistan experienced rising debt and declining reserves. Since 2022, the situation has reversed, with a declining debt-to-GDP ratio and rapid accumulation of foreign reserves.

Experts highlight that this progress indicates multiple positive economic signals, including reduced external vulnerabilities, stronger reserves, increased business confidence, and overall economic stability.