SBP buys USD 863 million in July as Pakistan builds forex reserves
Central bank's net dollar purchases rose 5.5% to USD 8.104 billion in FY26, while foreign exchange reserves reached approximately USD 21.5 billion
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
The State Bank of Pakistan (SBP) purchased a net USD 863 million from the domestic interbank foreign exchange market in July 2026, compared with USD 189 million in the same month a year earlier, as the central bank continued efforts to strengthen the country's foreign exchange reserves.
Purchases in July, the first month of fiscal year 2026-27, were also higher than the USD 841 million recorded in June.
In FY26, the central bank's net dollar purchases totaled USD 8.104 billion, an increase of 5.5% from USD 7.684 billion in the preceding fiscal year.
The figures reflect the SBP's net foreign exchange interventions, including outright and swap transactions with commercial banks.
Pakistan's SBP-held foreign exchange reserves stood at approximately USD 21.5 billion as of October 16, equivalent to about three months of import cover.
The reserve position has also been supported by a USD 3 billion Eurobond issuance following sovereign credit rating upgrades.
Pakistan has also reached a staff-level agreement with the International Monetary Fund (IMF), supporting the outlook for external financing. The agreement remains subject to approval by the IMF's Executive Board.
What are Pakistan's foreign exchange reserve targets?
SBP Governor Jameel Ahmad expects reserves to reach USD 23 billion by the end of December 2026 and USD 25 billion by the end of June 2027. The central bank aims to exceed the latter target.
The projections account for expected inflows from the remaining Panda bond issuance, multilateral lenders and the IMF, after factoring in external debt servicing.
Pakistan faces total external debt servicing obligations of USD 21.5 billion in FY27, comprising USD 17.5 billion in principal and USD 4 billion in interest payments.
Of the principal repayments, USD 7.3 billion in bilateral obligations is expected to be rolled over, while approximately USD 3.2 billion in bilateral commercial loans is being refinanced. Roughly half of the latter amount has already been repaid and refinanced.
After accounting for expected rollovers and refinancing, the governor estimated net external debt repayments at around USD 10 billion for FY27. Approximately USD 5 billion has already been repaid, with around USD 5.5 billion remaining for the rest of the fiscal year.
The SBP has also raised its remittance forecast for FY27 to at least USD 45 billion from the previous estimate of USD 44 billion.
The SBP said the Pasban Remittance Reward Scheme had yet to produce a measurable impact on inflows.
The banking industry-funded initiative offers quarterly cash prizes totaling PKR 4 billion to encourage overseas Pakistanis to send money through formal banking channels. The central bank expects the scheme to support remittance inflows.
Higher remittances, continued foreign exchange purchases and planned external financing inflows are expected to remain important to Pakistan's efforts to strengthen reserves and meet external financing obligations.
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