SBP remits Rs1.93tr profit to government

SBP remits Rs1.93tr profit to government

The State Bank of Pakistan (SBP) has transferred Rs1.932 trillion to the federal government as its profit for fiscal year 2025-26, providing additional revenue and helping the government limit its reliance on domestic borrowing.

According to the SBP’s Annual Financial Statements issued on Thursday, the central bank earned a net profit of Rs1.990 trillion during FY26. After meeting accounting and statutory requirements, the bank transferred Rs1.932 trillion of its surplus to the federal government.

The latest transfer, however, represents a decline from the previous year. In FY25, the SBP earned around Rs2.5 trillion and remitted most of the amount to the government.

The central bank has generated and transferred trillions of rupees to the government over the past three years. These funds have strengthened the government’s non-tax revenue and helped it manage fiscal pressures, particularly when tax collection falls short of annual targets.

The government has also used the additional liquidity to manage its domestic debt. Data from the SBP shows that borrowing through long-term Pakistan Investment Bonds (PIBs) has increased, while reliance on short-term Market Treasury Bills has declined over the past three years.

SBP profitability has fallen as the central bank gradually lowered its benchmark interest rate from a peak of around 22 per cent to 11.5pc. However, renewed inflationary pressure from higher energy prices amid tensions in the Middle East could complicate the monetary policy outlook.

Meanwhile, Pakistan’s domestic debt rose to Rs59.94 trillion by the end of FY26, increasing by about Rs4.969 trillion, or 9pc, during the year.

The country’s total liquid foreign exchange reserves reached $22.587 billion in the week ending August 21, according to the SBP. The central bank’s own reserves increased by $17 million to $17.098 billion, while commercial banks held $5.488 billion.