ISLAMABAD: The foreign exchange reserves of Pakistan’s central bank have reached an all-time high of $21.4 billion, finance adviser Khurram Schehzad said this week, emphasizing that the development shows Islamabad’s external buffers are strengthening and its financial resilience is increasing.
Pakistan has grappled with a macroeconomic crisis for the past couple of years, which reached its peak in 2023 when the South Asian country had less than $3 billion in forex reserves. Pakistan was on the brink of a sovereign default in 2023 with only a few weeks of import cover left. However, a last-gasp financial bailout deal with the International Monetary Fund (IMF) helped Islamabad increase its reserves and stave off the crisis.
Schehzad wrote on X that the current level of forex reserves, $21.4 billion, means Pakistan has an import cover of over three months. At the height of its macroeconomic crisis in 2023, Islamabad only had an import cover of two weeks, the official said.
“This is more than reserve accumulation,” Schehzad said on Thursday. “It represents a significant strengthening of Pakistan’s external buffers and resilience — enhancing the country’s capacity to meet external obligations and withstand global shocks.”
The Pakistani official credited stronger remittances, services exports, improved current account figures and renewed access to international capital markets as reasons for the growth of the forex reserves.
“From crisis-level reserves to an all-time high — Pakistan’s external resilience has been rebuilt,” Schehzad said.
The development comes at a crucial time for Islamabad, as it deals with the conflict in the Middle East which has spiked global prices of oil and made fuel imports costlier for Pakistan. Pakistan imports most of its fuel supplies from the Middle East and a surge in oil prices means Islamabad will have to pay more to meet its energy demands.
Pakistan has sought to achieve sustainable economic growth in recent years, with Prime Minister Shehbaz Sharif calling for long-term reforms in the energy, taxation, state-owned enterprises and other sectors.
Islamabad hopes increasing its reserves will help reduce its reliance on bilateral and multilateral creditors such as China, Saudi Arabia, UAE and the IMF.
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