Pakistan’s foreign reserves decline marginally as SBP and commercial banks diverge

Pakistan’s total liquid foreign reserves saw a slight decline of $23.96 million, settling at $19.66 billion for the week ending October 31, 2025, according to official data released by the State Bank of Pakistan (SBP). This represents a minor decrease of 0.12%, reflecting a divergence between the central bank and commercial banks’ reserve positions.

The foreign reserves held by the State Bank of Pakistan saw a positive shift, increasing by $31.24 million, or 0.22%, rising from $14.47 billion on October 24 to $14.50 billion as of October 31. This marks a continuation of efforts by the SBP to bolster its foreign exchange reserves, essential for meeting international debt obligations and ensuring macroeconomic stability.

In contrast, reserves held by commercial banks declined by $55.20 million, or 1.06%, from $5.21 billion to $5.16 billion. Analysts attribute this decrease to factors such as corporate clients making foreign payments for imports or services, or fluctuations in the value of foreign currencies, particularly the US dollar.

The combination of the SBP’s increase and the commercial banks’ decline resulted in a slight reduction in the country’s overall liquid foreign reserves. The SBP continues to hold a dominant share, approximately 73.7%, of the total reserves, highlighting its importance in managing Pakistan’s external financial position.

The stability in the SBP’s reserves is viewed positively, suggesting that Pakistan’s immediate external financial position remains manageable. However, the outflows from commercial banks indicate ongoing pressures, primarily driven by import needs and debt servicing. Economists will be closely monitoring future data to assess whether this trend persists and how broader economic measures may impact reserve accumulation.