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The State Bank of Pakistan (SBP) reported an increase of $4.2 billion in its foreign exchange reserves during 2025, although the pace of growth slowed in the year’s second half.

Official data shows that SBP reserves were at $11.7 billion on January 3, 2025, and rose to $15.915 billion by the end of December. However, the second half of the year saw a more modest increase of $1.4 billion, from $14.5 billion on June 30 to $15.9 billion by year-end.

While the overall rise in reserves bolstered external buffers and supported exchange rate stability, a substantial portion of the reserves consists of loans from friendly countries. The SBP aims to increase its reserves to over $18 billion by the end of FY26. However, the slower pace of accumulation in recent months has raised concerns.

Malik Bostan, Chairman of the Exchange Companies Association of Pakistan, said that 2025 has been relatively more stable compared to 2024, with the rupee holding firm against the US dollar. He attributed this stability to the IMF agreements, which have helped contain dollar volatility. 

However, Bostan also pointed out that stagnant export growth continues to be a key concern for the economy.

Despite record remittance inflows providing some breathing room for dollar purchases from the interbank market, reserve growth remained limited. Between January and September 2025, the SBP purchased $4.2 billion from the market, lower than last year’s total purchases of $9.7 billion. These earlier purchases played a significant role in rebuilding reserves.

The increased reserves contributed to exchange rate stability, helping maintain relative economic steadiness despite weak growth and rising poverty. However, analysts caution that the second half of FY26 may pose challenges, with large loan rollovers, the need to curb the trade deficit, and efforts to stimulate GDP growth and create jobs for both skilled and unskilled workers.

In its weekly statement, the SBP reported that its reserves rose by $13 million to $15.915 billion during the week ending December 26, 2025. Total liquid reserves held by the country stood at $21.012 billion, including $5.097 billion held by commercial banks.