Pakistan's foreign reserves decline due to external debt repayments

Foreign reserves held by the State Bank of Pakistan (SBP) decreased by $152 million to $11.097 billion for the week ended March 7, due to external debt repayments, the central bank said Thursday.

Net foreign reserves held by commercial banks stood at $4.83 billion, bringing the country's total liquid foreign reserves to $15.93 billion.

Despite this decline, foreign-exchange risks have diminished following an increase in the SBP's FX reserves, supported by the unlocking of the International Monetary Fund (IMF) program.

Pakistan's economic outlook is improving from very weak levels, with enhanced government liquidity and external positions compared to 2024.

The approval of a 37-month, $7 billion IMF Extended Fund Facility in September 2024 provides a credible source of external financing for Pakistan over the next few years.

Moody’s forecasts GDP growth of 3% in 2025 and 4% in 2026, up from 2.5% in 2024, indicating a positive trend for the nation's economy.