SBP foreign exchange reserves rise by $2bn since July 2025 despite Middle East crisis

KARACHI: The State Bank of Pakistan (SBP) has reported a notable increase in its foreign exchange reserves, which have grown by $2 billion since July 2025. According to data released by the SBP on Thursday, the central bank's reserves rose by $41 million during the week ending March 6, reaching a total of $16.341 billion.

The SBP, in its latest monetary policy statement, highlighted that it has been actively purchasing US dollars from the interbank market as part of its strategy to bolster reserves. This move comes amid ongoing concerns regarding the Middle East crisis, which experts believe could negatively impact the foreign exchange reserves of countries like Pakistan.

Despite these challenges, remittance inflows have continued to show growth. The SBP noted that remittances in February amounted to $3.3 billion, although this figure was lower than the inflows recorded in January. Currency market experts have observed that remittance inflows typically increase by about 20 percent during Ramazan, and they suggest that the current figures could be higher.

Millions of Pakistanis are employed in the Middle East, and their contributions remain significant. According to the SBP, remittances from the region accounted for 53 percent of total inflows during the first eight months of the fiscal year 2025-26. However, the ongoing conflict in the Middle East has raised concerns about job security for overseas workers, with reports indicating that new employment opportunities are currently limited due to the escalating war.

While the SBP's efforts and the steady flow of remittances have helped strengthen Pakistan's foreign exchange reserves, the uncertain situation in the Middle East continues to pose risks for future inflows and the overall economic outlook.