The foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $28 million, reaching $14.30 billion as of August 29, 2025. The latest data, released on Thursday, highlights a modest but steady rise in the country’s financial position.
According to the central bank, total liquid foreign reserves, including those maintained by SBP and commercial banks, stood at $19.66 billion. Out of this, net foreign reserves held by commercial banks amounted to $5.36 billion.
Weekly Performance of SBP Reserves
The SBP confirmed, “During the week ended on 29-Aug-2025, SBP reserves increased by US$28 million to US$14,302.5 million.” Just a week earlier, the reserves were recorded at $14.27 billion. The improvement reflects continued inflows, helping Pakistan maintain its financial stability despite external challenges.
This week’s reserve growth, though small, is a positive development. It comes at a time when Pakistan is managing debt repayments, high import bills, and inflationary pressures linked to global energy prices.
Why SBP Reserves Matter
The increase in SBP reserves supports Pakistan’s ability to handle external obligations and currency stability. A stronger reserve position helps:
- Maintain the rupee’s stability against the US dollar.
- Reduce inflationary pressures tied to imported goods.
- Reassure international creditors of Pakistan’s repayment capacity.
- Provide businesses and investors with greater financial confidence.
Without steady reserves, Pakistan risks higher borrowing costs and exchange rate volatility. Even modest gains like this week’s $28 million increase contribute to economic resilience.
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Distribution of Reserves
The central bank holds the bulk of Pakistan’s reserves, with $14.30 billion in its account. Commercial banks contribute $5.36 billion, making up the balance of the total $19.66 billion. This composition underlines the critical role of SBP in ensuring external stability.
Market observers note that consistent growth in reserves, no matter how small, is preferable to sharp swings that create uncertainty in the economy.
Key Drivers Behind the Increase
Several factors support the SBP reserves increase by $28 million this week:
- Stable remittance inflows from overseas Pakistanis.
- Controlled import demand due to government policies.
- Continued disbursements from global financial institutions.
- Improved foreign exchange earnings from exports and other inflows.
These factors collectively strengthen Pakistan’s financial cushion, even though external risks remain.
Economic Outlook
While reserves have reached $14.30 billion, Pakistan still faces pressure from upcoming external debt obligations. Economic experts stress that the country must diversify its revenue sources, expand exports, and attract long-term foreign investment to maintain reserve stability.
At the same time, support from the International Monetary Fund (IMF) and other development partners will remain critical. If inflows continue at the current pace, analysts expect reserves to hover between $14–15 billion in the coming weeks, offering temporary relief for the rupee and the broader economy.
Conclusion
The SBP reserves increase by $28 million this week, taking the total to $14.30 billion as of August 29, 2025. Pakistan’s total liquid foreign reserves now stand at $19.66 billion, with commercial banks holding $5.36 billion.
Although the rise appears modest, it signals a steady improvement in the country’s external account. For Pakistan, maintaining this upward trend will be key to managing debt, stabilizing the rupee, and ensuring long-term financial resilience.
