By Moaaz Manzoor

Pakistan’s total liquid foreign exchange reserves increased by $1.94 billion during the week ended July 3, 2026, reaching $23.99 billion as a sharp rise in reserves held by the State Bank of Pakistan (SBP) strengthened the country’s external liquidity position.

According to the SBP, total liquid foreign exchange reserves rose to $23.989 billion on July 3 from $22.045 billion recorded on June 24, reflecting an increase of $1.944 billion during the period.

The improvement was almost entirely driven by the central bank’s reserves, which climbed by $1.944 billion to $18.471 billion from $16.527 billion on June 24. Net foreign exchange reserves held by commercial banks remained broadly unchanged, edging up by $0.3 million to $5.518 billion from $5.517 billion.

The latest increase lifted Pakistan’s total reserve position close to the $24 billion mark and represented the highest level recorded since the end of FY2020-21, when the country’s liquid foreign exchange reserves stood at $24.398 billion.

The SBP data showed that reserves remained relatively stable during the first three weeks of June before declining in the week ended June 24. Total reserves stood at $22.672 billion on June 5 and increased slightly to $22.742 billion on June 12. They later declined to $21.485 billion on June 19 and then recovered to $22.045 billion on June 24 before recording a substantial increase in the first week of July.

Reserves held by the central bank followed a similar pattern. The SBP’s reserves stood at $17.215 billion on June 5 and $17.221 billion on June 12 before falling to $15.916 billion on June 19. They recovered to $16.527 billion on June 24 and then rose sharply to $18.471 billion by July 3.

Commercial bank reserves remained comparatively stable throughout the period. They were recorded at $5.457 billion on June 5, $5.521 billion on June 12, $5.568 billion on June 19 and $5.517 billion on June 24 before closing at $5.518 billion on July 3.

The latest reserve position also marks a significant improvement from the end of FY2024-25, when Pakistan’s total liquid foreign exchange reserves stood at $19.269 billion. Compared with that level, reserves increased by approximately $4.72 billion by July 3, 2026.

The SBP’s own reserves also rose substantially from $14.506 billion at the end of FY2024-25 to $18.471 billion, reflecting an increase of nearly $3.97 billion. Commercial bank reserves increased from $4.763 billion to $5.518 billion over the same period.

The annual data show that Pakistan’s liquid foreign exchange reserves have rebounded sharply since FY2022-23, when they bottomed out at a critical $9.160 billion. They subsequently recovered to $13.996 billion in FY2023-24 and $19.269 billion in FY2024-25 before approaching $24 billion in early July 2026.

The rise in reserves strengthens Pakistan’s capacity to meet external payment requirements and provides support to the foreign exchange market. However, the sustainability of the reserve build-up will depend on the country’s external financing flows, trade balance, remittances and debt repayment requirements in the coming months.

Credit: INP-WealthPk