KARACHI: The foreign exchange reserves held by the State Bank of Pakistan (SBP) continued to decline for the third consecutive week, falling by $72 million during the week ended Aug 1. This brings the SBP’s total reserves down to $14.232 billion.

Since July 11, the central bank has lost a cumulative $294m in reserves, reversing part of the gains made by the end of the last fiscal year. The SBP had closed FY25 with $14.5bn in reserves — surpassing the target set under the IMF programme, a milestone that was widely seen as a policy success.

However, maintaining this level has proven challenging amid ongoing external debt servicing pressures. The SBP attributed the recent decline to scheduled external debt repayments.

Pakistan’s external debt servicing remains a major strain on the economy, with around $26bn paid in FY25 and a similar amount projected for FY26. These payments continue to exert downward pressure on the country’s foreign currency buffers.

According to SBP data, the country’s total liquid foreign reserves stood at $19.495bn as of Aug 1, which includes $5.263bn held by commercial banks.

Published in Dawn, August 8th, 2025