Pakistan’s total foreign exchange reserves have reached a record high, the State Bank of Pakistan reported on Thursday, in a development that marks a notable milestone for the country’s external position.
Total reserves stood at $26.864 billion, compared with $26.754 billion in the previous week. The increase of $110 million over the week took the total to the highest level recorded so far.
The State Bank of Pakistan, known as the SBP, reported the figures on Thursday. The latest reading reflects the combined position of the country’s foreign exchange holdings, and the week-on-week rise, while modest in size, was enough to carry the total past its previous peak.
Within the total, the SBP’s own reserves were $21.568 billion on 30 October. That figure represents a sharp rise from $16.568 billion in February, showing how far the central bank’s own holdings have moved over the intervening months.
The SBP has added over $5 billion to its own reserves since February, according to the figures reported. The scale of that addition, measured over a period of months rather than years, underlines the pace at which the central bank’s position has strengthened during that time.
The figures were reported against a difficult international backdrop. The Gulf war that began on 28 February jolted many economies, including Pakistan, and the pressure created by that conflict has formed part of the setting in which the reserves position has had to be managed.
At the same time, the country’s trade position has remained under strain. The trade deficit during July to October of FY27 reached $14.6 billion, a figure that shows the gap between what the country earns from its exports and what it spends on its imports over that four-month period.
That deficit figure sits alongside the reserves milestone, and the two numbers together describe a position in which the external account continues to face pressure even as the stock of reserves has risen to a record level.
The financial sector considers the current reserves sufficient to keep the exchange rate stable, according to the reporting on the figures. That assessment links the size of the reserves directly to the stability of the currency, treating the stock of foreign exchange as a buffer that supports confidence in the exchange rate.
A stable exchange rate matters because it affects the cost of imports, the value of earnings sent home, and the wider sense of predictability around the currency. The view from the financial sector, as reported, is that the present level of reserves provides that support.
The record total of $26.864 billion therefore carries weight beyond the figure itself. It is presented as a high point in the series, and as a level that, in the judgement of the financial sector, is enough to underpin stability in the exchange rate at a time when the trade deficit remains large.
The week-on-week increase of $110 million may appear small when set against a total of more than $26 billion, but it was the movement that carried the total to its record. The previous week’s total of $26.754 billion was itself close to the peak, and the latest rise took the figure beyond it.
For the SBP, the position on 30 October of $21.568 billion in its own reserves is the central part of the story. The rise from $16.568 billion in February shows the central bank’s holdings growing by more than $5 billion, and that growth accounts for the improvement in the overall position.
The reporting does not present the record as the end of the pressures facing the economy. The trade deficit of $14.6 billion for July to October FY27 remains a substantial figure, and the Gulf war that began on 28 February continues to form part of the background against which the economy is operating.
What the figures do show, on the evidence reported, is that the stock of foreign exchange held by the country has reached its highest recorded level, and that the financial sector regards that stock as sufficient to keep the exchange rate stable for now.
Source: Dawn
