Pakistan’s Foreign Exchange Assets Hit Three-Year High of $18.7 Billion
Islamabad, The Gulf Observer: Pakistan’s total foreign exchange assets reached a three-year high of $18.7 billion as of November 2024, signaling improved support for the country’s external account amidst economic challenges.
According to Topline Securities, the total foreign exchange assets include $5.5 billion in gold reserves, which are near record highs due to surging global gold prices. An additional $4.7 billion in liquid reserves is held with commercial banks but is not included in this total.
Saad Hanif, head of research at Ismail Iqbal Securities, attributed the rising reserves to strict import restrictions, delays in dividend repatriation, and successful debt rollovers with multilateral and bilateral partners. These measures collectively reduced foreign exchange outflows and strengthened the external account.
“The consistent increase in gold reserves reflects a diversification strategy to bolster the external account, especially with gold hitting multiple all-time highs this year,” Hanif said, adding that Goldman Sachs predicts gold prices could reach $3,000 per troy ounce by the end of 2025.
However, Hanif emphasized the need for structural reforms to ensure sustainable reserve growth, including boosting exports, attracting foreign investment, and improving energy sector efficiency. “Temporary administrative controls must evolve into policy-driven economic stability for long-term resilience,” he added.
In the first five months of the fiscal year 2025, Pakistan recorded a current account surplus of $944 million, a significant turnaround from a deficit of $1.67 billion in the same period last year. As of January 3, the State Bank of Pakistan’s foreign exchange reserves stood at $11.7 billion, enough to cover over two months of imports.
The government is also pursuing a $1 billion loan tranche from the International Monetary Fund (IMF) under the $7 billion Extended Fund Facility program. Prime Minister Shehbaz Sharif announced this week that the United Arab Emirates has agreed to roll over a $2 billion debt due this month, further easing repayment pressures.
According to the SBP, of the $26.1 billion in total external payments for the fiscal year, $10.4 billion has been paid or rolled over, leaving $5 billion in debt repayments excluding planned rollovers.
