Since March 2022, Pakistan’s foreign exchange reserve has reached its highest level. This reflects a substantial strengthening of the country’s external position and signals a shift from previous debt-led stabilizations.
According to the analysts, the improvement is structural, due to policy discipline and reform continuity. The policy did not rely on fresh external borrowing.
The State Bank of Pakistan states that total forex reserves currently stand at $21.1 billion. Out of which $15.9 billion is held by SBP. This is the highest since March 4, 2022. $5.2 billion is held by commercial banks. The import cover used to be 2.38 months previously and has now improved to over 2.6 months. This represents a significant rise.
The recovery is different because it is not driven by fresh borrowing. The external debt has not increased. The debt-to-GDP ratio has fallen from 31 percent to 26 percent. The reserves of SBP have risen from $2.9bn to $16bn, forward foreign exchange liabilities have been cut around 65 percent, at the same time.
In previous years, especially from 2015 to 2022, the reserves were falling while debt was rising. The trend has remained since 2022. The debt pressure has eased, and reserves keep rebuilding sharply.
This rise reflects the country’s shift away from a debt-driven crisis. The country is moving toward sustainable stability. Economic stability now has a stronger foundation. The climate for investment is also better. The country is now better prepared for future fiscal challenges.
Also read: Pakistan economy stabilizes, investor confidence rises: Bloomberg
