"Pakistan’s total Foreign Exchange (FX) assets (liquid reserves plus gold) stood at a three-year high of $18.7 billion as of November 2024. This includes gold reserves of $5.5 billion, which is near record high thanks to rising gold prices,” Topline Securities reported on Saturday.
“In addition to this, $4.7 billion 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, noted that the upward trend in the nation's reserves is a result of stringent import restrictions, postponed dividend repatriation, and effective debt rollovers with both multilateral and bilateral partners, which have collectively alleviated the strain on foreign exchange outflows.
He believes that the steady rise in gold reserves signifies a strategy aimed at diversifying and bolstering external accounts. This year, gold has reached several all-time highs, and Goldman Sachs forecasts that prices may reach $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 ultimately transition to a policy-oriented approach to achieve economic stability and long-term resilience, he stated. Pakistan has reported a current account surplus of $944 million for the first five months of the fiscal year 2025, in contrast to a deficit of $1.67 billion during the same timeframe last year.
As of January 3, the State Bank of Pakistan's foreign exchange reserves were recorded at $11.7 billion, sufficient to cover more than two months' worth of imports. The country is in the process of securing a $1 billion loan tranche from the International Monetary Fund as part of the $7 billion Extended Fund Facility program, with the next IMF review scheduled for this quarter.
This week, Prime Minister Shehbaz Sharif announced that the United Arab Emirates has consented to extend a $2 billion debt repayment due this month. According to the State Bank of Pakistan, out of total external obligations amounting to $26.1 billion, $10.4 billion has already been settled or rolled over. The outstanding debt repayment for the fiscal year, excluding anticipated rollovers, is $5 billion.