Pakistan’s forex reserves expected to reach $9-10 billion by year-end

The Federal Minister for Finance and Revenue, Muhammad Aurangzeb, said on Tuesday that Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) are expected to close the fiscal year at around $9-10 billion mark.

This news comes amid growing optimism about the country’s financial stability and the potential for a new agreement with the International Monetary Fund (IMF).

Speaking at the 7th Leaders In Islamabad Business Summit, themed “Collaborating for Growth,” Minister Aurangzeb outlined several positive developments in Pakistan’s economic landscape.

The country’s central bank currently holds just over $8 billion in reserves, despite a recent $1-billion bond payment.

Aurangzeb highlighted the dramatic increase from last year’s reserves of $3.4 billion, which covered just 15 days of imports, to over $8 billion.

The finance minister indicated that once the IMF disburses its final tranche by the end of this week, the foreign exchange reserves would exceed $9 billion.

He projected that by the end of June, the reserves could reach between $9-10 billion, offering about two months’ worth of import coverage.

In his address, Minister Aurangzeb also addressed concerns about the IMF’s involvement in Pakistan’s economic recovery.

He said that the current IMF programme is not solely driven by the international body, but is also a reflection of Pakistan’s own strategies for overcoming economic challenges.

“This is our requirement as a country if we want to get out of the trap we are in,” he said, adding that the government had productive discussions with the IMF in Washington, D.C., to establish a broader and longer-term programme.

The IMF mission is set to visit Pakistan in mid-May, with staff-level agreements expected by June or early July, contingent on progress with the country’s privatisation plans.

Aurangzeb stressed that the IMF should be seen as a means to an end, rather than the end itself, emphasising that Pakistan’s long-term economic stability requires a commitment to market-driven reforms and sustainable growth opportunities.

The summit’s inaugural session provided a platform for the finance minister to discuss the government’s efforts to stabilise the economy, promote growth, and attract international investment.

The anticipated agreement with the IMF and a more robust foreign exchange reserve position signal a hopeful outlook for Pakistan’s economic recovery.