Biggest decline in over 3 years: SBP foreign exchange reserves plunge $2.66bn on debt repayments

Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by record $2.66 billion on a weekly basis, clocking in at $9.06 billion as of June 20, data released on Thursday showed.

This is the biggest weekly decline in SBP reserves in over 3 years. The central bank’s reserves had previously declined by $2.9 billion back in March 2022.

This week’s decline brought the SBP reserves to 11-month low.

Total liquid foreign reserves held by the country stood at $14.39 billion. Net foreign reserves held by commercial banks stood at $5.33 billion.

The SBP reserves saw a massive fall due to Government of Pakistan’s (GOP) external debt repayments, mainly repayment of commercial borrowing.

However, during the current week, SBP has received the GOP commercial loans equivalent to $3.1 billion; and multilateral loans of over $500 million, according to the central bank statement.

“These inflows will be reflected in SBP’s FX reserves for the week ending on 27-Jun-2025,” SBP said.

Speaking to an event at the Pakistan Stock Exchange (PSX) in April this year, SBP Governor Jameel Ahmad revised up projection for foreign exchange reserves (held by SBP) to $14 billion by the end of June 2025. Earlier, the central bank had estimated FX reserves at $13 billion by the end of June.

“It would be difficult if not impossible for the central bank to meet the $14 billion reserves target by June-end,” said Sana Tawfik, Head of Research at Arif Habib Limited (AHL).

Last week, SBP reserves increased by $46 million on a weekly basis, clocking in at $11.72 billion as of June 13.