Pakistan’s foreign exchange reserves have seen a rise, crossing the $20 billion for the first time in over three years. According to the State Bank of Pakistan (SBP), the reserves increased by $1.93 billion in just one week, reaching a total of $20.02 billion as of July 4, 2025. This is the highest level since March 18, 2022, when the reserves were last this strong.
The SBP’s holdings rises by $1.77 billion during the week, bringing its total to $14.502 billion. Meanwhile, reserves held by commercial banks also saw growth, adding $162 million to reach $5.527 billion. The central bank credited this increase mainly to official inflows from multilateral institutions and friendly nations.
“This is a significant recovery,” said an official at the SBP. “Our foreign reserves have reached $14.5 billion, the highest level since March 2022. It shows the growing stability of Pakistan’s economy after years of challenges.”
This rise in reserves is being seen as an achievement for Pakistan, which struggled with an economic crisis in recent years. After peaking at $15 billion in March 2022, the reserves dropped sharply due to balance of payments issues and political uncertainty. By January 2023, reserves had fallen to a dangerous low of $2.9 billion, raising fears about Pakistan’s ability to meet external debt obligations.
A slow recovery began in mid-2023. The reserves climbed to $8.7 billion in July 2023 and crossed $9.5 billion by October 2024. Financial experts say the latest jump to $14.5 billion in June 2025 shows the positive impact of reforms and external support.
“Pakistan has shown resilience,” said an analyst at Arif Habib Limited. “The economy still has challenges, but this increase in reserves gives us some breathing space and improves investor confidence.”
The higher reserves also mean Pakistan can now cover about 2.7 months of imports, up from earlier levels that were dangerously low. Analysts at AKD Securities pointed out that while the figure is still below the ideal range, it is a big improvement from last year.
The Pakistani rupee still continues to face slight pressure against the US dollar. On Thursday, the rupee slipped 0.03 percent in the inter-bank market, closing at 284.56. This is a decline of nine paisa compared to Wednesday’s close of 284.47.
Currency traders said the minor depreciation was due to increased demand for dollars for import payments.
The US dollar eased slightly from its two-week high against major currencies after former President Donald Trump announced a 50 percent tariff on certain imports. While markets mostly ignored the news, Brazil’s currency, the real, dropped by 2.8 percent.
“This increase gives Pakistan some relief, but it should not make us complacent,” said a senior economist in Islamabad. “We must focus on increasing exports, controlling imports, and attracting foreign investment to sustain this recovery.”
