Pakistan’s foreign reserves decline amid debt repayments

The State Bank of Pakistan (SBP) reported a $127 million decrease in foreign reserves during the week ended April 11, bringing the total to $10.57 billion, primarily due to external debt repayments.

Net foreign reserves held by commercial banks stood at $5.1 billion, with the country’s total liquid foreign reserves amounting to $15.66 billion.

A combination of weak financial inflows and ongoing debt obligations has contributed to the decline in SBP’s foreign exchange reserves. However, analysts anticipate a recovery in the coming months, citing lower debt repayments and the expected realization of planned official inflows. By June, reserves could surpass $13 billion, according to financial experts.

Meanwhile, Pakistan’s current account balance saw a historic monthly surplus of $1.195 billion in March—its highest on record.

This marks a significant improvement from the $363 million surplus recorded in March last year and a $97 million deficit in February 2025.

The positive shift was driven by a surge in remittances, which climbed 37% year-on-year to $4.1 billion, compared to $2.9 billion in the same period last year.

Economists say sustained remittance growth and improved external inflows could provide relief to Pakistan’s balance of payments as the fiscal year progresses.