Rise in forex reserves reflects impact of strict import restrictions and successful debt rollovers, says expert
Nazir Siyal
KARACHI: Pakistan’s total foreign exchange assets reached a three-year high of $18.7 billion as of November 2024 resulting in essential support to the country’s external account.
According to Topline Securities, the country’s total foreign exchange assets, comprising liquid reserves and gold, stood at a three-year high of $18.7bn which also includes gold reserves of $5.5bn — a near-record high courtesy of rising gold prices.
In addition to this, $4.7bn of the liquid reserves are held with commercial banks and are not part of this total FX assets, it added.
Saad Hanif, the head of research at Ismail Iqbal Securities, said the rising trend in the country’s reserves reflected the impact of strict import restrictions, delays in dividend repatriation, successful debt rollovers with multilateral and bilateral partners, which collectively eased pressure on FX outflows.
He thinks the consistent increase in gold reserves indicates a diversification strategy to strengthen external accounts. Gold has hit multiple all-time highs this year, and Goldman Sachs predicts prices could hit $3,000 per troy ounce by the end of 2025.
“While these measures have provided temporary stability, sustainable reserve growth will require structural reforms, including export enhancement, attracting foreign investment and improving energy sector efficiency,” Hanif said.
“Administrative controls must eventually give way to policy-driven economic stability for long-term resilience,” he added. Pakistan recorded a current account surplus of $944 million in the five months of the fiscal year 2025, compared with a deficit of $1.67bn during the same period last year. As of January 3, the State Bank of Pakistan’s (SBP) FX reserves amounted to $11.7bn — enough to cover over two months of imports.
