IMF Support Sparks Momentum in Pakistan’s Reserve Position

Pakistan’s external position has received a notable boost as the country’s foreign exchange reserves crossed key year-end expectations, signalling improved stability following fresh international inflows and central bank market operations.

Foreign exchange reserves held by the State Bank of Pakistan (SBP) have risen above $15.8 billion, surpassing the December 2025 target. The increase followed the receipt of $1.2 billion from the IMF under the Extended Fund Facility and the Resilience and Sustainability Facility, along with continued dollar purchases from the interbank market.

SBP Outlook and IMF Support

Briefing analysts after the Monetary Policy Committee meeting, SBP Governor Jameel Ahmed said reserves exceeded the targeted $15.5 billion level despite relatively weak net financing inflows. He expressed confidence that reserves could rise further to $17.8 billion by June 2026, provided planned official inflows materialise on schedule during the second half of the fiscal year.

External Payments and Financing Trends

The governor noted that official inflows have already reached $2.1 billion as of December 12, with more expected between January and June FY26. Pakistan’s total external debt repayments for FY26 are estimated at $25.8 billion, of which $9.7 billion has been paid or rolled over. Remaining net repayments stand at $6.9 billion, excluding future rollovers.

Credit Growth and Monetary Conditions

SBP data shows broad money growth accelerated to 14.9% by late November, driven largely by government borrowing. Private sector credit rose by Rs187 billion during July-November, mainly in textiles, trade and chemicals, while consumer financing especially auto loans remained firm amid easing financial conditions.