Pakistan’s Foreign Exchange Reserves Show Modest Increase

Pakistan’s liquid foreign exchange reserves experienced a welcome uptick this week. The State Bank of Pakistan (SBP) reported a modest SBP reserves rise of $16 million, bringing its total holdings to $16.72 billion. This positive development, recorded for the week ending January 9, 2026, signals a potentially stronger financial outlook for the nation. Consequently, this growth contributes significantly to national economic stability.

Overall, the country’s total foreign exchange reserves reached an impressive $21.248 billion. Furthermore, commercial banks also maintained substantial holdings, with their reserves standing at $5.177 billion during the same period. This collective increase underscores Pakistan’s improving economic resilience.

Understanding the Recent SBP Reserves Rise and Import Cover

During the week, total liquid reserves collectively increased by $56 million on a week-on-week basis. Crucially, Pakistan’s import cover remained stable, holding steady at approximately 3.4 months. This stability reflects a notably improved external buffer, essential for managing international trade and financial obligations. Therefore, a robust import cover strengthens the nation’s financial position.

This upward trend in reserves is primarily driven by recent builds stemming from routine inflows and strategic market operations. These improvements are significantly bolstered by strong remittances from overseas Pakistanis. Moreover, consistent external support has played a critical role in underpinning these financial gains, ensuring greater stability for the economy.

Key Drivers of Foreign Exchange Growth

Several factors contribute to the consistent growth of Pakistan’s overall foreign exchange. Primarily, robust remittance inflows from Pakistani expatriates provide a steady stream of foreign currency. Secondly, prudent market operations by the SBP help manage currency fluctuations effectively. Lastly, ongoing international financial support further stabilizes the economic landscape.

The Indispensable Role of Remittances

Remittances are an indispensable component of Pakistan’s economic health. These vital funds, sent home by overseas workers, not only support families but also substantially contribute to the nation’s foreign exchange holdings. A consistent rise in remittances directly enhances the country’s liquidity. As a result, this strengthens the overall financial resilience of Pakistan.