Pakistan’s Reserves Reach $21.5 Billion in Q1 as Exports Grow 11%
Key Facts
The State Bank of Pakistan’s foreign exchange reserves reached $21.5 billion in the first quarter of fiscal year 2027, Pakistan’s state broadcaster reported on October 26, citing a scorecard shared by Finance Minister adviser Khurram Shehzad. The announcement came as exports grew and remittances from overseas workers flowed in, strengthening the country’s foreign currency resources. Exports rose 11% to $11.2 billion during the quarter, while remittances reached $10.9 billion, the broadcaster said. Foreign direct investment also increased 20% to about $720 million between July and September 2026. These figures reflect first-quarter flows, while the officially published total reserves figure relates to an earlier snapshot in September.
The Finance Ministry said total liquid foreign reserves stood at $26.8 billion on September 18, 2026, comprising $21.4 billion at the central bank and $5.4 billion at commercial banks. In its monthly report, the ministry put the central bank’s liquid reserves at $21.39 billion on the same date. It said this level was equivalent to about three months of imports of goods and services. In September, the prime minister described the central bank’s reserves reaching $21.4 billion as a record level. He attributed the improvement to the central bank’s foreign currency purchases, as well as stronger remittances, services exports and the current account position.
The Finance Ministry said the issuance of $3 billion in Eurobonds in September was the main development supporting reserves. It also pointed to strong remittances and growth in information technology exports as contributors to the improved external position. In data covering July and August, workers’ remittances rose 14.7% to $7.29 billion, while services exports increased 28.8% to $1.81 billion. These figures cover flows in the first two months of the fiscal year, while the export and remittance figures reported by Pakistan’s state broadcaster cover the entire first quarter. The broadcaster also said the three major international ratings agencies had kept Pakistan’s ratings stable.
The central bank governor said the recovery in reserves came mainly from buying dollars in the market, rather than borrowing. He added that external debt had risen by about $5 to $6 billion over four years. The remarks put the central bank’s purchases at the center of his explanation for the increase in reserves, alongside the export and remittance inflows reported by official bodies. In forecasts reported on October 26, the governor said reserves could reach $23 billion by December 2026 and then $25 billion by June 2027, compared with $21.5 billion at the time of the remarks. The projected path implies continued growth in the coming months, in his assessment.
The latest published forecast from the International Monetary Fund projected gross official reserves of $22.9 billion in fiscal year 2027, with coverage equivalent to 2.9 months of imports of goods and services in the following year. In September, Pakistan’s finance minister discussed the economic outlook, reforms and external financing with an official at the U.S. Treasury Department. The Finance Ministry said the minister referred to a plan to diversify funding sources through sukuk, panda bonds and other instruments, following the $3 billion Eurobond issue in September. The governor’s reserve forecasts remain tied to targets for December 2026 and June 2027. The IMF estimate refers to fiscal year 2027 and is based on its forecasts published before the report.