Pakistan’s Forex Reserves Reach at $18.7b Marking Three-Year-High

upward trend in Pakistan's reserves reflects the impact of strict import controls

Sun Jan 12 2025
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KARACHI: Pakistan’s total foreign reserves reached at $18.7 billion as of November 2024 providing vital support to the country’s external account.

According to Topline Securities, Pakistan’s total foreign exchange assets, including liquid reserves and gold, reached a three-year high of $18.7 billion.

This figure includes gold reserves valued at $5.5 billion, driven to near-record levels by rising gold prices.

Additionally, $4.7 billion of the liquid reserves are held by commercial banks and are not included in the total foreign exchange assets, it added.

Saad Hanif, head of research at Ismail Iqbal Securities, stated that the upward trend in Pakistan’s reserves reflects the impact of strict import controls, delays in dividend repatriation, and successful debt rollovers with multilateral and bilateral partners, all of which have helped ease pressure on foreign exchange outflows.

He noted that the steady increase in gold reserves signals a diversification strategy to bolster the external account. With gold reaching several all-time highs this year, Goldman Sachs forecasts that prices could rise to $3,000 per troy ounce by the end of 2025.

He thinks the consistent increase in gold reserves indicates a diversification strategy to strengthen external accounts. Gold has hit multiple all-time highs this year, and Goldman Sachs predicts prices could hit $3,000 per troy ounce by the end of 2025.

“While these measures have provided temporary stability, sustainable reserve growth will require structural reforms, including export enhancement, attracting foreign investment and improving energy sector efficiency,” Hanif told daily ‘The News’.

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“Administrative controls must eventually give way to policy-driven economic stability for long-term resilience,” he added.

Pakistan recorded a current account surplus of $944 million in the first five months of fiscal year 2025, compared to a deficit of $1.67 billion in the same period last year. As of January 3, the State Bank of Pakistan’s (SBP) foreign exchange reserves stood at $11.7 billion, sufficient to cover over two months of imports.

Pakistan is working to secure a $1 billion loan tranche from the International Monetary Fund (IMF) under the $7 billion Extended Fund Facility (EFF) programme, with the next IMF review scheduled for this quarter.

Earlier this week, Prime Minister Shehbaz Sharif announced that the United Arab Emirates (UAE) had agreed to roll over $2 billion in debt maturing this month.

According to the State Bank of Pakistan (SBP), of the total external obligations of $26.1 billion, $10.4 billion has already been settled or rolled over. The remaining debt repayment for the fiscal year, excluding expected rollovers, amounts to $5 billion.

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