SBP Foreign Exchange Reserves Reach Record $21.4 Billion

Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) have climbed to an all-time high of $21.4 billion, following the arrival of proceeds from the country’s latest Eurobond issuance.

 

Pakistan raised $3 billion through a two-tranche Eurobond in the first week of September, marking its largest-ever single global bond transaction. The issuance comprised a $1.75 billion 5.5-year bond and a $1.25 billion 10-year bond.

 

The transaction attracted around $6 billion in bids from international investors, almost twice the amount offered by Pakistan. The government accepted $3 billion, with the proceeds strengthening the country’s foreign exchange reserves.

 

According to the SBP’s latest monetary policy statement, the Eurobond proceeds, along with continued foreign exchange purchases by the central bank, pushed its reserves to $21.4 billion.

 

The latest reserve level is significantly ahead of the SBP’s December 2026 target of $20.2 billion. The central bank had also successfully achieved its June 2026 reserve target of $18 billion.

 

Analysts at Topline noted that the latest figure has surpassed the $21 billion reserve target set for June 2027. The SBP is expected to revise its reserve target at the next monetary policy meeting.

 

The central bank expects planned financial inflows and continued FX purchases to help meet external financing requirements and further strengthen reserves. It projects reserves to move towards approximately three months of import cover by the end of June 2027.

 

On the external account, the current account deficit in July remained broadly in line with the MPC’s expectations. Imports of goods and services increased faster than exports, although strong workers’ remittances provided support.

 

For FY27, the SBP expects resilient remittances and rising ICT exports to keep the current account deficit contained within 0–1% of GDP. Based on the strong inflows recorded during the first two months of the fiscal year, remittances are expected to exceed the $44 billion target, while exports are projected to come in slightly above $32 billion.

 

However, the central bank warned that the external outlook remains vulnerable to elevated global commodity prices and supply disruptions linked to the ongoing developments in the Middle East.

 

On external debt servicing, the SBP estimates Pakistan’s FY27 requirement at $21.5 billion, around $5 billion lower than the previous year. After accounting for rollovers and refinancing, the net repayable amount stands at approximately $11 billion. Pakistan has so far repaid around $3.5 billion during the fiscal year.