Pakistan’s economy has reached a significant milestone as the country’s foreign exchange reserves climbed to their highest level since March 2022, reflecting improved macroeconomic stability and growing investor confidence.
According to the latest official figures, Pakistan’s total foreign exchange reserves have increased to $21.1 billion, marking a notable recovery after years of pressure on the external account. Analysts say the rise in reserves signals strengthening economic fundamentals and greater confidence in the country’s financial management.
Data released by the State Bank of Pakistan shows that its own reserves stand at $15.9 billion. As a result, Pakistan’s import cover has improved to more than 2.6 months, compared to less than two weeks recorded in February 2023 during the peak of the balance-of-payments crisis.
In 2023, central bank reserves had fallen to as low as $2.9 billion. The latest figures indicate an increase of nearly five-and-a-half times since then, underscoring a sharp turnaround in external liquidity conditions.
Economists attribute the improvement not to heavy borrowing, but to domestic economic recovery, tighter fiscal discipline and renewed confidence among investors. Official data shows that the external debt-to-GDP ratio has declined from 31 percent to 26 percent, while a gradual reduction in reliance on foreign loans reflects ongoing structural reforms and improved financial governance.
