Pakistan’s forex reserves steady at $19.6bn, rupee extends gains
Pakistan’s foreign exchange reserves rose slightly last week, supported by inflows at the State Bank and commercial banks, while the rupee posted its 10th straight session of appreciation against the US dollar.
According to data released by the State Bank of Pakistan (SBP), the country’s total liquid foreign reserves stood at $19.571 billion as of the latest reporting period. Of this, SBP’s reserves accounted for $14.256 billion, while commercial banks held $5.315 billion.
KTrade Securities noted that the overall reserves provide an import cover of 2.32 months, a key indicator of external sector stability. The SBP’s reserves rose 0.09% week-on-week ($13 million), while reserves held by commercial banks increased 1.16% ($61 million).
Pakistani Rupee Falls Against US Dollar on May 9,2025
In the currency market, the Pakistani rupee continued its steady recovery, inching up by 0.01% on Thursday. The local unit closed the day at 281.92 against the US dollar compared with 281.95 a day earlier, marking its 10th consecutive session of marginal gains. Despite this run, the rupee remains weaker by 1.20% on a calendar year-to-date basis but is up 0.65% in the current fiscal year, according to Ismail Iqbal Securities.
Traders and analysts attribute the improved sentiment to a sustained crackdown on illegal currency dealers and smuggling networks, which has helped stabilize flows in the formal market. Law enforcement measures have been credited with narrowing the gap between interbank and open market rates, improving confidence in official channels.
In global markets, the US dollar edged lower on Thursday as investors adopted a cautious stance ahead of Federal Reserve Chair Jerome Powell’s much-anticipated speech at the Jackson Hole symposium. Fresh criticism of the Fed’s independence by President Donald Trump added uncertainty to the outlook for monetary policy.
The dollar index, which measures the greenback against six major currencies, was up 0.4% during the session. Investors are weighing whether the Fed could move toward interest rate cuts in the coming months, though mixed signals from policymakers have kept expectations in check.
Meanwhile, gold prices in Pakistan surged despite a subdued international market. According to the All Pakistan Sarafa Gems and Jewellers Association, domestic gold rates rose by Rs2,000 per tola to Rs357,200, while the price of 10 grams increased by Rs1,715 to Rs306,241. A day earlier, gold had closed at Rs355,200 per tola after shedding Rs1,400.
Internationally, spot gold slipped 0.1% to $3,342.25 per ounce by 11:33 am ET (1533 GMT), while US gold futures for December delivery held steady at $3,386.50. Analysts described trading as range-bound, with Interactive Commodities Director Adnan Agar noting the metal remained confined within a $25–40 band amid the absence of new geopolitical developments, including the ongoing Russia-Ukraine conflict.
The divergence between local and global gold prices reflects both currency dynamics and domestic demand trends. In Pakistan, gold continues to serve as a hedge against inflation and exchange rate volatility, driving retail demand even when international prices remain steady.
The combination of stable foreign reserves, a strengthening rupee, and rising gold prices highlights the complex interplay of domestic reforms and global factors shaping Pakistan’s economic outlook. While the rupee’s recent gains provide temporary relief, analysts caution that external pressures—including oil prices, US monetary policy decisions, and geopolitical risks—remain key determinants of the currency’s medium-term trajectory.
With reserves at \$19.6 billion and the rupee in a rare streak of appreciation, Pakistan’s external sector outlook appears steadier, though market watchers stress that sustaining this momentum will require continued fiscal discipline, steady inflows, and careful management of import demand.