Pakistan’s Foreign Exchange Reserves: A Look at Recent Trends

Hey there! Have you been keeping an eye on the economic news from Pakistan? Well, there’s been some significant movement regarding the nation’s foreign exchange reserves, and I’m here to break it down for you. As of June 13, 2025, Pakistan’s total liquid foreign exchange reserves have climbed to a noteworthy $17.1 billion, according to the latest updates from the State Bank of Pakistan (SBP).

In just one week, the reserves held by the SBP increased by $46 million, bringing them up to $11.7 billion. Meanwhile, commercial banks are holding net foreign reserves of about $5.3 billion. So, what’s causing this increase? It primarily stems from the inflow of foreign currency and the SBP’s purchases of dollars from the local market. While this bolsters our reserves and cushions against external payment obligations, it also has a flip side: it prevents the Pakistani rupee from strengthening.

If you’ve been following the currency situation, you know that the rupee has taken a hit, losing three rupees against the dollar over just six weeks and reaching an 18-month low. This currency decline is further fueled by rising import costs and debt repayments, which unfortunately diminish the purchasing power of everyday Pakistanis.

Furthermore, the SBP reported foreign exchange interventions of $223 million back in February 2025, totaling cumulative dollar purchases to $5.3 billion from July 2024 through February 2025. On the latest trading day, the Pakistani rupee saw a minimal dip, closing at 283.64 against the dollar, slightly down from the previous day’s 283.55.

Switching gears a bit, let’s talk about gold prices. On the same day, they took a downturn in Pakistan, aligning with a steady trend globally as geopolitical tensions in the Middle East continued to stir the pot. Locally, the price of gold decreased by Rs460 per tola, bringing it to Rs358,595. If we look at the international markets, gold didn’t change much either, with spot prices dipped by 0.1%, clocking in at $3,365.79 per ounce.

Adnan Agar, the Interactive Commodities Director, pointed out an interesting observation: gold prices seem to be in a “holding pattern” while we await updates on the Israel-Iran conflict. The uncertainty around geopolitical developments is keeping investors on their toes. Meanwhile, platinum has recently surged to a decade-high after having lagged behind other precious metals for far too long.

So, to wrap things up, while Pakistan’s reserves have shown positive growth, the challenges—like currency depreciation and rising import bills—remain a significant concern. It’s a mixed bag of developments, but if you’re invested in precious metals or simply keeping an eye on economic trends, there’s a lot to watch out for in the coming weeks! What are your thoughts on these trends?