Reserves of foreign currency are close to $20 billion.

Pakistan found it difficult to pay for imports and exports even for a few weeks just two years ago. With improved inflows and increasing political stability, the nation’s external position has now significantly improved, with total liquid foreign exchange reserves reaching $19.87 billion.

The State Bank of Pakistan (SBP) reported that its foreign exchange reserves increased to $14.51 billion, a significant increase of $5.12 billion, or 54.5%, from $9.39 billion the previous year.

The SBP ascribed the increase in reserves to the realization of inflows during the last week of June, which included over $500 million from multilateral institutions and $3.1 billion in commercial loans. “This reflects a noticeable improvement in the country’s current account balance and realisation of planned inflows during the year,” said the SBP.

SBP’s reserves increased by $3.66 billion during the week ending June 27, 2025, from $9.06 billion the week before to $12.73 billion. Commercial banks currently hold $5.36 billion of the $19.87 billion in total liquid reserves.

Repayments of external debt caused a $2.66 billion decline the week before, which was followed by a spectacular recovery in the final week of FY25. Stabilization efforts and fiscal reforms intended to support the external account are credited with the recovery.

It is anticipated that this increase in reserves will boost the rupee, increase import coverage, and fortify Pakistan’s negotiating position with foreign lenders.

In Thursday’s interbank market, the Pakistani rupee closed at 283.86, up 9 paisas from the previous day’s closing rate of 283.95, showing a slight gain against the US dollar of 0.03%.

Despite a 1% drop in the global bullion market on Thursday, domestic gold prices increased as the US Federal Reserve’s earlier rate cut expectations were tempered by better-than-expected US payroll data.

The All-Pakistan Gems and Jewellers Sarafa Association (APGJSA) reports that the cost of 24-karat gold surged by Rs800 to Rs357,000 per tola. The price of 10-gram gold increased by Rs685 as well, reaching Rs306,069 in the end.

This came after a price decline the day before, when the per tola rate fell by Rs600 to Rs356,200. International sentiment remained pessimistic despite local gains.

Gold prices hovered around $3,325 and fluctuated between $3,311 and $3,363 globally, according to Adnan Agar, Director at Interactive Commodities. He warned that a break below this range could cause prices to drop to $3,250, pointing out a crucial support level between $3,310 and $3,300.

He added that trading volumes were anticipated to stay low on Friday due to the US bank holiday, with substantial activity probably starting up again on Monday.