Pakistan’s Forex Reserves Hit Highest Level Since March 2022

Pakistan’s foreign exchange reserves have reached their highest level since March 2022, marking another milestone for the country’s economy. “The historically high forex reserves reflect sustainable growth and strong investor confidence in the country’s leadership,” experts said.

According to the latest data, Pakistan’s total forex reserves have climbed to $21.1 billion, with the State Bank of Pakistan holding $15.9 billion. The country’s import capacity has now surpassed 2.6 months, compared to less than two weeks in February 2023.

Economic analysts noted that “the increase in reserves is due to local development and confidence rather than borrowing.” Data also shows that the ratio of external debt to GDP has declined from 31% to 26%, reflecting gradual reductions in external borrowing and disciplined fiscal reforms.

Analysts emphasized that the rise in forex reserves is not a result of temporary measures but “a clear outcome of economic recovery.” In 2023, the central bank’s reserves had fallen to $2.9 billion, but they have now surged to nearly $15.9 billion, marking an almost fivefold increase compared to last year.

Additionally, forward foreign exchange liabilities have decreased by nearly 65%, significantly reducing future financial pressures. Between 2015 and 2022, Pakistan experienced a steady increase in debt and a decline in reserves, but the situation has changed since 2022, with reserves rising rapidly and the debt-to-GDP ratio decreasing.

Experts believe this progress signals multiple positive indicators, including reduced external economic vulnerabilities, stronger reserves, increased confidence among the business community, and overall economic stability. They said, “The recent rise in Pakistan’s forex reserves is not merely a numerical improvement but a sign of qualitative change. Pakistan is moving from debt-based survival policies to sustainable external economic stability.”

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