Pakistan’s forex reserves rise to $26.8 billion as gold prices recover

Pakistan’s forex reserves rise to $26.8 billion as gold prices recover

KARACHI: Pakistan’s foreign exchange reserves recorded a modest increase during the week ended October 2, 2026, while gold prices in the domestic market rebounded slightly on Thursday following a sharp decline in the previous session. The Pakistani rupee also maintained its upward momentum against the US dollar, whereas silver prices moved lower.

According to the latest data released by the State Bank of Pakistan (SBP) on Thursday, the central bank’s foreign exchange reserves increased by $15 million to $21.454 billion during the week under review.

The country’s total liquid foreign exchange reserves also rose, reaching $26.797 billion compared with $26.771 billion a week earlier. The figures indicate an overall increase of $26 million in the country’s liquid reserves.

However, the improvement in the country’s overall reserve position came despite a decline in foreign currency holdings maintained by commercial banks. Their net foreign exchange reserves fell by $17 million to $5.344 billion during the same period.

The latest figures show that the SBP continues to hold the bulk of Pakistan’s liquid foreign exchange reserves, while commercial banks account for the remaining portion. Changes in these reserves remain an important indicator of the country’s external financial position and its capacity to meet international payment obligations.

Meanwhile, the Pakistani rupee extended its marginal gains against the US dollar in the interbank market on Thursday. The local currency closed at Rs277.01 per dollar, strengthening by one paisa from Wednesday’s closing rate of Rs277.02.

Although the daily movement remained limited, the rupee’s performance reflected relative stability in the foreign exchange market.

In the domestic bullion market, gold prices edged higher on Thursday as international prices recovered modestly amid uncertainty surrounding the US Federal Reserve’s interest rate outlook and concerns about rising US government debt.

According to rates released by the All-Pakistan Gems and Jewellers Sarafa Association, the price of 24-karat gold increased by Rs600 per tola to Rs435,036. The price of 10 grams of gold also rose by Rs515 to Rs372,973.

The recovery followed a significant decline on Wednesday, when gold prices dropped by Rs3,100 per tola to settle at Rs434,436. Thursday’s increase partially offset the previous session’s losses but did not establish a clear direction for the market.

International bullion prices also moved higher. Spot gold gained 0.3 per cent to reach $4,122.36 per ounce by 12:20 pm EDT (1620 GMT), after touching its lowest level since August 5 on Wednesday.

A stronger US dollar and rising US Treasury yields had put pressure on gold during the previous session. Higher yields can make non-yielding assets such as gold less attractive to investors, while movements in the dollar can influence bullion demand in international markets.

Investors are now assessing the Federal Reserve’s future monetary policy decisions, with expectations surrounding interest rates remaining a key factor in determining gold’s near-term direction. Concerns over elevated US debt levels have also added to uncertainty in financial markets.

Adnan Agar, director at Interactive Commodities, described the gold market as “completely sluggish,” noting that prices were struggling to establish a decisive trend.

He said bullion was trading within a relatively narrow range, with investors uncertain whether prices would move higher or face further downward pressure. According to Agar, the market has yet to identify a clear catalyst that could determine its next major move.

He considered further weakness possible but said a decline below $4,000 per ounce appeared unlikely unless major economic data or unexpected developments triggered fresh selling.

Agar also expected the market to establish a clearer trading range in the coming days as investors respond to new economic indicators and developments affecting expectations for US interest rates.

In contrast to gold, silver prices declined in Pakistan on Thursday. The price of silver fell by Rs120 per tola to Rs6,368, according to the latest domestic market rates.

The mixed performance of precious metals highlights continued uncertainty in the bullion market, where investors are weighing currency movements, bond yields, economic indicators and the outlook for US monetary policy.