Pakistan's foreign reserves decline amid external debt payments

The State Bank of Pakistan's foreign reserves declined by $252 million, reaching $11.17 billion as of February 7, due to external debt payments.

Net foreign reserves held by commercial banks stood at $4.7 billion, bringing the country's total liquid foreign reserves to $15.9 billion.

Analysts attributed the central bank's proactive measures during the consolidation phase as critical in managing dollar outflows. By tightening import restrictions and overseeing the repatriation of profits from foreign investments, the central bank effectively stabilized the currency.

As Pakistan navigates FY25, the outlook appears cautiously optimistic. External debt repayments are projected to total $26.1 billion, with expectations of rolling over $16.4 billion, leaving a manageable net repayment of $3.7 billion.

Following the IMF disbursement, the country is well-positioned to attract inflows from multilateral and bilateral lenders.