Pakistan foreign reserves drop $1.4bn in less than a month

State Bank of Pakistan data shows reserves at $17bn, raising questions about external stability despite the central bank holding its benchmark rate at 11.5%.

By Handelsavisen Newsroom · Automated 2026-07-31 02:48 UTC · 1 min read

Pakistan’s foreign exchange reserves have fallen by $1.4 billion in less than a month, leaving the State Bank of Pakistan (SBP) with a buffer of $17 billion.

The central bank announced the decline on Thursday, revealing that $229 million was lost during the week ended July 24 alone.

5% in recent cycles, the erosion of reserves suggests that monetary tightening alone has not yet stabilized the balance of payments.

The rapid drawdown underscores persistent pressure on the country’s external accounts.

While the SBP has maintained its benchmark policy rate at 11.5% in recent cycles, the erosion of reserves suggests that monetary tightening alone has not yet stabilized the balance of payments.

Investors are likely to scrutinize whether the current buffer is sufficient to cover near-term import and debt obligations.

The reserve loss comes as the Monetary Policy Committee (MPC) keeps rates on hold, signaling a cautious approach to further tightening.