By Staff Reporter
KARACHI: Pakistan’s foreign exchange reserves surged to $14.51 billion by the end of June, surpassing a target set by the International Monetary Fund, after China rolled over $3.4 billion in loans and the country secured additional financing from other sources, the central bank said.
The State Bank of Pakistan (SBP) reported in a statement issued Wednesday that its reserves rose by $5.12 billion from the last week of June, when they stood at $9.39 billion. As of June 30 this year, reserves were $11.675 billion, reflecting a substantial influx of funds in the final weeks of the fiscal year.
China provided a critical boost last week by rolling over $3.4 billion in loans. The package includes $2.1 billion that has been part of the central bank’s reserves for the past three years and a refinanced $1.3 billion commercial loan that Pakistan repaid two months ago. In addition, Pakistan secured $1 billion from Middle Eastern commercial banks and $500 million from multilateral lenders, pushing reserves above the IMF-mandated threshold of $14 billion.
“This reflects a noticeable improvement in the country’s current account balance and realisation of planned inflows during the year,” the SBP said in its statement.
The IMF, as part of a $7 billion bailout program, had required Pakistan’s reserves to exceed $14 billion by June 30, the end of the 2024-25 fiscal year. Meeting this benchmark is a key condition for the South Asian nation to continue accessing financial support from the fund, a lifeline for an economy battered by dwindling reserves and mounting debt obligations.
Earlier in June, the central bank’s reserves had edged up by $167 million to $11.675 billion during the week ending June 6, still short of the year-end goal. The increase in the final weeks of the month underscores the importance of the recent inflows, particularly China’s financial assistance.
Pakistan has been leaning heavily on external financing to shore up its foreign exchange position. The rollover of the $2.1 billion Chinese loan ensures those funds remain available without immediate repayment pressure, while the refinancing of the $1.3 billion commercial loan effectively offsets an earlier repayment, bolstering the reserve tally. The additional $1.5 billion from Middle Eastern banks and multilateral lenders further cements the improvement.
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