Pakistan's foreign exchange reserves held by the State Bank of Pakistan (SBP) fell sharply by $2.66 billion during the week ended June 20, 2025, bringing the total to $9.06 billion.
"This marks the second-largest weekly decline since data was available, ie, 2011," noted Arif Habib Limited (AHL). The steepest fall on record was the $2.91 billion drop seen in March 2022.
The decline was driven primarily by external debt repayments by the government of Pakistan, with a major portion attributed to the repayment of commercial loans, the State Bank said. However, the pressure on reserves is expected to ease in the coming days.
During the current week, the SBP has received $3.1 billion in fresh commercial borrowing and over $500 million from multilateral sources. These inflows are expected to be reflected in reserves data for the week ending June 27, 2025, the central bank added. As of June 20, 2025, Pakistan's total liquid foreign currency reserves stood at $14.4 billion, comprising $9.06 billion held by the SBP and $5.33 billion held by commercial banks.
JS Global Head of Research Waqas Ghani Kukaswadia stated that the drop in reserves is likely due to a payment rollover and the corresponding inflows should appear in next week's figures. The situation highlights the sensitivity of Pakistan's reserves to debt repayments, even as incoming inflows are expected to stabilise the outlook in the short term.
Moreover, as of May 2025, Pakistan's Roshan Digital Account (RDA) gross inflows reached $10.381 billion. Of the total funds received, $1.787 billion has been repatriated by account holders while $6.648 billion has been utilised within the country. Consequently, the net liability stood at $1.947 billion, representing the portion of funds available for potential repatriation, according to AHL.
Furthermore, the Pakistani rupee saw a slight uptick against the US dollar on Thursday, appreciating by 0.02% in the inter-bank market. By the end of trading, the local currency closed at 283.67, marking a modest gain of five paisa compared to Wednesday's close at 283.72.
Globally, the US dollar weakened, hitting multi-year lows against both the euro and the Swiss franc. The decline was driven by growing concerns over the future independence of the US Federal Reserve.
Meanwhile, gold prices in Pakistan rose, though international bullion rates saw a slight decline, influenced by reduced geopolitical tensions in the Middle East and ongoing uncertainty surrounding the US Fed's rate outlook. In the domestic market, the price of gold increased by Rs1,335 per tola, reaching Rs356,000.
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