Pakistan’s forex reserves suddenly jump by $3 billion:Hit record $26 billion; India’s reserves over 25 times higher at $717 billion

Pakistan’s foreign exchange reserves have risen nearly sevenfold in the past three years to $26.79 billion. In January 2023, Pakistan was facing a severe dollar shortage, with the State Bank of Pakistan (SBP) holding just $3.08 billion in reserves. As of September 11, 2026, the SBP’s foreign exchange reserves had reached $21.39 billion, the highest level in the bank’s history. Including foreign exchange held by other banks, Pakistan’s total reserves stood at $26.79 billion. However, the increase has been driven more by foreign loans and external funding than by Pakistan’s own earnings. India’s foreign exchange reserves rose by $9.9 billion to $716.9 billion during the week ended August 14, according to the Reserve Bank of India.
Shehbaz says rising reserves show success of economic policies Prime Minister Shehbaz Sharif praised Finance Minister Muhammad Aurangzeb, State Bank Governor Jameel Ahmad and his economic team after Pakistan’s foreign exchange reserves reached a record level. He also thanked Pakistanis living abroad for contributing to the achievement. Shehbaz said the record foreign exchange reserves held by the State Bank were the result of the economic team’s sustained efforts. He said this indicated that the government’s economic policies were moving in the right direction. He also said Pakistan’s return to international capital markets was increasing global investors’ confidence in its economy. Reserves rise by $3.06 billion in one week In the week ending September 11, Pakistan’s foreign exchange reserves increased by $3.06 billion. According to the State Bank, the main reason was funds raised through a Eurobond. This means the rise in reserves does not mean Pakistan earned a new $3.06 billion in one week. A large part of the amount was raised through borrowing. What is a Eurobond? A Eurobond is a type of bond issued to raise money from foreign markets. Investors who buy the bond lend money to the government. The government repays the amount with interest after a fixed period. Pakistan raised funds by issuing a Eurobond in the international market and added the money to its foreign exchange reserves. This has increased the dollars available for foreign payments for now, but the debt will have to be repaid later. How many dollars does Pakistan have now? State Bank: $21.39 billion Other banks: $5.40 billion Total foreign exchange reserves: $26.79 billion A week earlier, total reserves stood at $23.72 billion. This means they increased by around $3.08 billion in seven days. Total reserves are still slightly below the level of around $27.1 billion recorded in September 2021. However, the State Bank’s reserves of $21.39 billion are now at their highest level ever. How does Pakistan benefit from higher reserves? Higher foreign exchange reserves give Pakistan a larger dollar buffer. These dollars can be used to buy oil, machinery, raw materials and other essential goods. Dollars are also needed to repay foreign debt instalments and interest. The current reserves are enough to cover around three months of import expenses. However, this does not mean Pakistan can operate for three months without earning any new dollars. It will continue to need fresh dollars to pay for imports and service its debt. Pakistanis working abroad also provide support Money sent by Pakistanis working abroad, known as remittances, is a major source of foreign exchange. Pakistan received around $3.66 billion in remittances in August. The figure was around $3.63 billion in July. During the same period, Pakistan’s current account deficit with the rest of the world also narrowed. It stood at around $98 million in August, compared with $445 million in July. Pakistan’s imports are still higher than exports In August, Pakistan imported around $6.64 billion worth of goods and services, while exports stood at around $3.33 billion. This means Pakistan is spending more dollars on goods and services from abroad than it earns through exports. Pakistan’s total deficit stood at around $543 million in July-August 2026. It was $853 million during the same period of the previous financial year. This shows an improvement in the external account position, but the need for foreign currency remains. Maintaining reserves is now the bigger challenge For Pakistan, simply increasing its foreign exchange reserves will not be enough. It will also have to maintain them in the coming months. Three things will be particularly important: Remittances from abroad remain strong Pakistan earns more dollars through exports Spending on oil and other essential imports remains under control A rise in oil prices, in particular, could increase Pakistan’s import bill and put renewed pressure on its foreign exchange reserves. Pakistan also has old debt to repay Despite record reserves, Pakistan remains responsible for repaying its existing foreign debt. Between September and December 2026, it has several payments due to the IMF. According to Reuters, Pakistan is considering extending its 30-billion-yuan currency swap arrangement with China in 2027. If needed, the arrangement can provide the two countries access to each other’s currencies. Pakistan is also in talks with the US over a $10-billion exchange stabilisation facility. It could be used if pressure on foreign exchange increases. In addition, Pakistan’s $7-billion IMF programme is still ongoing. ​