SBP reserves rise to $21.5bn without new borrowing

SBP reserves rise to $21.5bn without new borrowing

The State Bank of Pakistan’s (SBP) foreign exchange reserves climbed from less than $3 billion in February 2023 to $21.5 billion as of October 9, 2026, largely through the central bank’s own foreign currency purchases rather than fresh borrowing, Governor Jameel Ahmad told international investors in Bangkok.

Speaking on the sidelines of the International Monetary Fund (IMF) and World Bank annual meetings, Ahmad said Pakistan had also reduced the SBP’s forward liabilities from more than $5.7 billion to less than $1 billion. He attributed the reserve accumulation to improved external sector conditions, supported by an almost balanced current account in fiscal year 2026 (FY26).

According to a statement issued on Saturday, the governor met senior executives from major global financial institutions, including JPMorgan, Citibank, Jefferies, Deutsche Bank, Barclays, Bank of America, MSCI, Standard Chartered and Mitsubishi UFJ Financial Group, during his October 12–17 visit. He also held discussions with bilateral and multilateral partners, other central banks and international credit rating agencies.

Ahmad said sustained macroeconomic policies and structural reforms had strengthened Pakistan’s ability to withstand domestic and external shocks. Inflation fell sharply from elevated levels in FY23 to nearly within the target range in FY26, despite a significant increase in global oil prices.

Pakistan’s real gross domestic product (GDP) growth recovered from a contraction in FY23 to 3.7% in FY26. The SBP projects growth of between 3.5% and 4.5% for FY27.

The governor said regulatory reforms, particularly those targeting exchange companies and promoting formal channels for remittances, had improved liquidity in the interbank foreign exchange market. The central bank expects to continue purchasing foreign currency, with the current account deficit projected to remain between zero and 1% of GDP in FY27.

He also highlighted improvements in the fiscal position, noting that the primary fiscal balance recorded its third consecutive annual surplus in FY26. The continued surpluses are helping put Pakistan’s public debt-to-GDP ratio on a downward path.