Advisor to the Finance Minister Khurram Schehzad has said that Pakistan’s foreign exchange reserves have reached their highest level since March 2022, underscoring a material strengthening of the country’s external position and a clear break from past, debt-led stabilization cycles.
“Quality over quantity: forex reserves rise, import cover improves – without debt buildup/decline in foreign debt-GDP in 2022-2025 vs 2015-2022. Pakistan’s foreign exchange reserves have reached their highest level since March 2022, underscoring a material strengthening of the country’s external position and a clear break from past, debt-led stabilisation cycles”, he posted on his official ‘X’ handle.
He said total foreign exchange reserves have risen to $21.1 billion, with the State Bank of Pakistan (State Bank of Pakistan) holding $15.9 billion (the highest level since March 4, 2022 ) while commercial banks’ reserves stand at $5.2 billion. Import cover has improved to over 2.60-month from 2.38-month earlier, compared to less than two weeks in February 2023, indicating greater resilience in trade and payments.
Khurram noted that the current reserve accumulation was structurally different from earlier episodes, as confidence has been rebuilt largely without fresh external borrowing.
Comparing trends, he said that during the period from June 2015 to June 2022, external public sector debt increased from $55 billion to $100 billion (an average rise of $6.4 billion per year), while SBP’s foreign exchange reserves declined, resulting in higher debt and weaker buffers.
In contrast, since June 2022 till 2025, public sector external debt has remained broadly unchanged in absolute terms, while the external debt-to-GDP ratio has declined from 31 percent to 26 percent by June 2025.
SBP reserves have been rebuilt from $2.9 billion to about $15.9 billion, nearly a 5.5x increase, and forward liabilities have been reduced from $5.7 billion in February 2023 to below $2 billion. This time, reserves rose while debt stabilized, improving both stock and quality of external buffers.
For stakeholders, markets and investors, he said this signaled a reduction in sovereign external risk, greater durability of macroeconomic stability, greater confidence that stability is sustainable, and improved prospects for medium-term credit and ratings outlook.
For businesses and corporates, he said the improved FX liquidity and import planning reduced uncertainty around payments and LCs, and more stable environment for pricing, costing, and investment. For the economy and public, he said lower risk of external shocks feeding into inflation, stronger capacity to manage volatility without disruption, and gradual restoration of economic confidence.
The advisor said Pakistan has rebuilt reserves without piling up debt, restored import cover from weeks to months, forward FX risk materially reduced f and strengthened its external position both quantitatively and qualitatively.
He said rising forex reserves and sharply improved import cover reflect a stronger, more resilient, and more credible external position built this time on reforms, discipline, and sustainability, not debt. “This is not just a numerical recovery – It is a structural improvement in economic strength and confidence,” he remarked.