KARACHI: With arrival of Eurobond inflows, the State Bank of Pakistan’s (SBP) foreign exchange reserves have surged to all-time high level of USD 21.4 billion mark.
In the first week of September, Pakistan has raised some USD 3 billion through a landmark dual-tranche Eurobond issuance, marking its largest-ever global bond transaction in a single offering.
The government split USD 3 billion Eurobond issuance into two tranches, including a USD 1.75 billion 5.5-year bond and a USD 1.25 billion 10-year bond. The issue attracted nearly double offers of USD 6 billion from global investors. However, Pakistan accepted USD 3 billion offers to build the foreign exchange reserves.
SBP in its monetary policy statement revealed that, the issuance of Eurobonds in September, along with significant foreign exchange purchases by SBP, helped SBP’s FX reserves to increase to USD 21.4 billion.
SBP’s target for the December 2026 was USD 20.20 billion, however, the SBP has achieved this target before the time. Previously, the SBP has also meet June 2026 end target of USD 18 billion successfully.
“This is an all-time high level, surpassing the USD 21 billion target set for Jun 2027,” an analyst at Topline said and added that by the next monetary policy meeting, SBP will share a revised reserves target number.
According to SBP, the realisation of planned financial inflows and SBP’s continued FX purchases are assessed to meet the external financing requirements and support FX reserves, which are projected to approach the 3-month import cover by end-June 2027.
On external sector side, the current account deficit in July was largely in line with the MPC’s expectations, as the growth in imports of goods and services outpaced the increase in exports and robust workers’ remittances. Going forward, resilient workers’ remittances and higher ICT exports are expected to contain the current account deficit within 0 to 1 percent of GDP in FY27.
With the current growth numbers in the first two months of this fiscal year, SBP believes remittances will cross the USD 44 billion target. On the exports side, SBP expects the FY27 number to be slightly above USD 32 billion.
This outlook, however, SBP warns that remains susceptible to elevated global commodity prices and supply constraints amidst the unfolding developments in the Middle East.
According to Topline, on the debt servicing side, SBP mentioned that External Debt Servicing for FY27 is USD 21.5 billion, USD 5 billion down from last year’s requirement. Out of this USD 21.5 billion, USD 11 billion is net repayable after adjusting for rollover/refinance. So far, SBP has repaid USD 3.5 billion.
Copyright Business Recorder, 2026
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