By Moaaz Manzoor

Pakistan’s foreign currency deposits declined to $6.79 billion by the end of April 2026, reflecting lower resident holdings and softer trade-financing activity amid evolving liquidity and external-sector conditions, according to data released by the State Bank of Pakistan (SBP).

The latest SBP data showed total foreign currency deposits fell to $6,786.28 million in April 2026 from $6,814.03 million in March 2026 and $6,959.85 million in December 2025.

On a monthly basis, deposits declined by approximately $27.75 million during April, while the overall stock remained nearly $173.57 million lower than its level in December 2025.

Resident deposits continued to account for the largest share of total foreign currency holdings and remained the primary factor behind the overall decline.

Resident foreign currency deposits fell to $5,824.99 million in April 2026 from $5,880.66 million in March 2026 and $5,986.20 million in December 2025.

Within resident deposits, demand deposits stood at $2,072.53 million, while savings deposits declined to $1,680.06 million in April 2026 from $1,776.55 million a month earlier.

However, resident time deposits increased slightly to $2,072.40 million from $2,003.25 million in March 2026, indicating some movement toward longer-term holdings.

In contrast, non-resident foreign currency deposits recorded a modest increase during the month.

Non-resident deposits rose to $961.29 million in April 2026 from $933.38 million in March 2026.

Within this category, non-resident demand deposits stood at $609.18 million, while savings deposits amounted to $218.47 million. Non-resident time deposits also increased to $133.63 million from $121.18 million in the previous month.

The SBP data also showed a slight decline in the overall utilisation of foreign currency deposits during the review period.

Total utilisation fell to $6,786.28 million in April 2026 from $6,814.03 million in March 2026, mainly reflecting reduced financing activity.

Trade-related financing remained one of the major components of utilisation.

Total financing declined to $1,833.38 million in April 2026 from $1,864.04 million in March 2026 and $2,175.05 million in December 2025.

Within financing activity, pre-shipment financing declined to $740.86 million in April 2026 compared with $785.23 million in March 2026, while post-shipment financing stood at $131.55 million.

Import financing, however, increased slightly to $960.97 million in April 2026 from $939.99 million in March 2026, although it remained below the $1,240.21 million recorded in December 2025.

Meanwhile, the placement of foreign currency deposits with banks and the SBP stood at $1,447.03 million during April 2026 compared with $1,478.08 million in March 2026.

At the same time, balances held abroad increased notably to $826.69 million in April from $698.70 million a month earlier, while cash in hand rose to $286.12 million from $268.76 million during the same period.

Overall, the latest data indicate that foreign currency deposit trends remained relatively stable despite fluctuations in financing activity and changing external-sector conditions.

Pakistan’s external position improved during FY26 due to stronger remittance inflows, reserve accumulation, and relative exchange-rate stability. However, rising oil prices, geopolitical tensions in the Middle East, and uncertainty in global financial markets continued to affect foreign currency flows and broader external-sector sentiment.

The latest figures also suggest relatively cautious positioning by deposit holders and financial institutions amid evolving domestic and international economic conditions.

Going forward, foreign currency deposit trends are likely to remain closely linked to remittance inflows, exchange-rate expectations, trade activity, and overall confidence in the external sector.

Credit: INP-WealthPk