Pakistan’s Overall Foreign Reserves Fall by $311M in One Week

Pakistan’s total liquid foreign exchange reserves declined by $310.5 million during the week ending July 25, 2025, bringing reserves down to $19.607 billion. According to State Bank of Pakistan (SBP) data, central bank reserves fell by $153 million, while commercial banks recorded a $157.8 million drop. The decline was primarily due to external debt servicing obligations, highlighting ongoing pressure on Pakistan's external account. Despite the current dip, SBP Governor Jameel Ahmed has forecasted a recovery of reserves to $15.5 billion by December 2025 and $17.5 billion by June 2026.

• Total Liquid Reserves: Now $19.607 billion, down 1.56% week-on-week.

• SBP Reserves: Decreased by $153 million to $14.304 billion.

• Commercial Banks: Net reserves fell to $5.303 billion, down $157.8 million.

• Debt Payments: External debt obligations are cited as the principal cause of the decline.

• Timeline: Decline observed between week-ending July 18 and July 25, 2025.

• Rupee Movement: Slight appreciation against USD; gain linked to anti-smuggling enforcement.

• Reserve Forecast: SBP expects reserves to rise to $15.5 bn by Dec 2025 and $17.5 bn by June 2026. 

Regular debt servicing continues to bottleneck reserve buildup, even as policy corridors open. Despite inflows and IMF backing, resource deployment lags obligations.

The parallel slide in commercial banks’ reserves—down by nearly 3%—raises concerns about tightening liquidity in financial markets. Broader banking sector performance may be impacted.

While July saw rising reserves (e.g., over $20 billion in early July), the recurring outflows underscore Pakistan’s dependence on debt rollovers and financial inflows for stability.

Governor Jameel Ahmed has projected a steady replenishment of central bank reserves to $15.5 billion by the end of 2025 and $17.5 billion by June 2026—assuming inflows continue and fiscal discipline holds.

The government is tightening control over black market currency trade and illicit foreign exchange channels as part of fiscal stabilization efforts. Authorities have shut down unauthorized exchange outlets, mobilised the Federal Investigation Agency (FIA), and benefited from military intelligence-led enforcement—supporting the rupee's slight appreciation.

The $310.5 million drop in foreign exchange reserves for the week ending July 25, 2025, highlights Pakistan’s ongoing economic vulnerability under external financing pressures. While modest rupee gains and enforcement actions offer relief, sustaining reserve levels will require structural austerity, stronger inflows from remittances and exports, and cautious debt rollover arrangements.