SBP reserves fall sharply in the latest weekly update, with foreign exchange reserves held by the State Bank of Pakistan dropping by $1.305 billion during the week ended June 19, 2026.
According to the State Bank’s latest foreign exchange reserves data, SBP-held reserves declined to $15.916 billion, down from $17.221 billion a week earlier. Pakistan’s total liquid foreign exchange reserves also fell to $21.485 billion, compared with $22.742 billion in the previous week.
The decline was partly offset by an increase in commercial banks’ net foreign exchange reserves, which rose to $5.568 billion from $5.521 billion in the previous week. That means the fall was concentrated almost entirely in central bank-held reserves rather than the banking system as a whole.
SBP Reserves Fall After Recent Gains
The latest drop comes after several weeks in which Pakistan’s reserves had remained relatively strong by recent standards. SBP 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.
The central bank’s weekly reserves table does not specify the reason for the decline. In Pakistan’s case, week-to-week movements in reserves can reflect external debt repayments, official inflows, foreign exchange purchases, valuation changes, and other balance-of-payments transactions.
Even after the fall, SBP-held reserves remained slightly above the April-end level of $15.851 billion, though below the May-end level of $17.189 billion.
Why Pakistan Forex Reserves Matter
Pakistan’s foreign exchange reserves are closely watched because they shape confidence in the country’s ability to meet external payments, finance imports, manage debt obligations and maintain currency stability.
Higher reserves give the State Bank more room to manage external pressure, while sharp declines can unsettle markets if they are not matched by incoming financing or improved current account flows. The rupee, import payments, debt servicing and investor sentiment are all sensitive to changes in the reserve position.
The latest decline is therefore important, but it should be read in context. Pakistan’s reserves have improved significantly from the extremely low levels seen during the 2022-23 balance-of-payments crisis. The IMF said in its latest Pakistan review that gross reserves had increased by around $11 billion since 2023, while also stressing that reserve accumulation still needed to continue.
External Account Still Supported by Current Account Surplus
The reserves fall comes despite a stronger current account position in May. SBP balance-of-payments data showed Pakistan recorded a current account surplus of $459 million in May 2026, compared with a $276 million deficit in April. For July-May FY26, the current account was also in surplus at $255 million, compared with a surplus of $1.618 billion in the same period of the previous fiscal year.
However, the trade account remains under pressure. Goods imports during July-May FY26 stood at $58.458 billion, while goods exports were $28.253 billion, leaving a goods trade deficit of $30.205 billion.
This explains why reserves remain a sensitive indicator even when the current account improves. Pakistan continues to depend on remittances, official inflows, multilateral support and controlled import demand to keep the external account stable.
IMF Programme Remains Central to Reserve Outlook
Pakistan’s reserve position is also tied to its ongoing IMF programme. In May, the IMF Executive Board cleared Pakistan to access about $1.32 billion in fresh funding, including around $1.1 billion under the Extended Fund Facility and about $220 million under the Resilience and Sustainability Facility.
The State Bank had earlier projected that planned official inflows, along with a contained current account deficit and strong remittances, could raise SBP foreign exchange reserves to $18 billion by June 2026.
The June 19 figure of $15.916 billion places SBP reserves below that projected end-June level, making the final reserve position for the fiscal year especially important for policymakers and markets.
What the Decline Means for the Rupee and Markets
A one-week fall of more than $1.3 billion does not automatically signal a renewed balance-of-payments crisis, but it does narrow the cushion available to the central bank.
For currency markets, the key question is whether the decline reflects a temporary external payment or a more persistent drain. If reserves recover through official inflows, remittances or improved current account performance, the market impact may remain limited. If reserves continue to fall, pressure on the rupee and investor confidence could increase.
Pakistan’s external position has improved compared with the crisis years, but it remains vulnerable to oil prices, debt repayments, import growth, export weakness and geopolitical shocks. The IMF has also warned that higher commodity prices and the Middle East conflict could weigh on Pakistan’s current account and inflation outlook.
A Warning Sign, Not Yet a Crisis Signal
The latest SBP reserves fall is a reminder that Pakistan’s external account remains fragile despite visible improvement over the past year. The country has rebuilt part of its reserve buffer, regained access to IMF financing, and posted a stronger current account in recent months. But the reserve cushion is still not large enough to absorb repeated heavy outflows without concern.
For now, the most important figures to watch are the next weekly reserves update, end-June reserve position, remittance inflows, import growth and any new official financing. A quick rebound would suggest the latest fall was payment-related and temporary. A continued slide would raise tougher questions about Pakistan’s ability to keep strengthening its external buffers.
Published in SouthAsianDesk, June 30, 2026
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