Reserves triple without new debt
Pakistan's economy has navigated one of the most turbulent times in recent history, marked by record inflation, depleted foreign exchange reserves and external account pressures.
From inflation peaking at 38% in May 2023 to reserves falling to critically low levels at $4.4 billion, the country faced severe macroeconomic instability. However, decisive monetary tightening, structural reforms and improved external inflows have shifted the trajectory towards stability. Speaking at the Independence Day event, State Bank of Pakistan (SBP) Governor Jameel Ahmad said the economy is now on a path to sustainable growth, with inflation brought down to historic lows, reserves tripled without adding foreign debt and the current account posting a surplus for the first time in more than a decade.
The SBP commemorated the Independence Day with a flag hoisting ceremony. In his keynote address, Governor Jameel Ahmad said that the SBP is striving to ensure monetary and financial stability for long-term prosperity of the nation.
He noted that in the recent past, "we have faced unprecedented economic challenges and we are now on a path towards economic stability and sustainable growth". The governor pointed out that inflation had reached 38% in May 2023 and in response, the SBP adopted a series of measures. These efforts paid off, with inflation dropping to 11.8% by May 2024 and to a historic low of 3.2% by June 2025.
He remarked that the SBP responded to the improving inflation outlook by reducing its policy rate in seven gradual steps, from 22% to 11%, since June 2024. "Our monetary policy remains geared towards maintaining the hard-earned gains in price stability, while ensuring inflation remains within 5-7%," Ahmad said. "This will help unlock broader economic and business opportunities."
Regarding external sector improvements, he shared that Pakistan's foreign exchange reserves have nearly tripled, rising from $4.4 billion at the end of FY23 to $14.5 billion by the end of FY25. The current account surplus of $2.1 billion, the first in 14 years, and record-high remittances of $38.3 billion from overseas Pakistanis have significantly contributed to this improvement.
Ahmad stressed that the SBP has endeavoured to build foreign exchange reserves to improve economic resilience against external shocks, adding that the increase in reserves has been achieved without any rise in foreign debt. International credit rating agencies have upgraded Pakistan's rating in recognition of recent measures, which will help unlock foreign investment opportunities.
Stressing the importance of technological innovation in financial inclusion, the governor highlighted the SBP's digital initiatives, including the spinning off Raast – Pakistan's instant payment system – into a separate subsidiary to enhance service offerings for the adoption of digital payments. In addition, the SBP has taken a number of measures to modernise payment infrastructure to enable the public to transact and remit funds through state-of-the-art facilities.
He also said that the central bank has recently introduced an improved framework that allows the opening of accounts without the need to visit a bank branch. This will benefit the public, especially women.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
18 minutes ago
- Express Tribune
Pak-Afghan relations: winds of change?
Are we in for a radical change in Pak-Afghan relations after an unprecedented move by proponents of the former Northern Alliance, many of whom now embody the National Resistance Front (NRF) of Afghanistan, led by Ahmed Masood, the son of the late Ahmed Shah Masood? Or does a rude shock await the new Kabul regime through new alignments involving Tajikistan, the historical base of the Northern Alliance? But before delving into the Pak-Afghan issue, let's look at three critical developments in the current "world in flux". President Donald Trump's peace and tariffs offensives are indeed enforcing recalibration, if not major shifts, in global alliances. Trump's meeting with Russian President Vladimir Putin — regardless of immediate outcomes — marks a defining moment both for their bilateral relations and the present turbulent geopolitics. Secondly, after China's upfront posturing on the tariffs issue forced Trump into extending the deadline for trade negotiations, Indian business executives and Prime Minister Narendra Modi are slowly upping the India card with their anti-America rhetoric. This is triggering calls across India for boycotting McDonald's, Coca-Cola, Amazon and Apple, among others — all prompted by US tariffs on exports from India, which is the biggest market for Meta's WhatsApp and beverages like Pepsi, Coca-Cola or Starbucks. India, being the world's most populous country and the fourth largest economy, certainly sees value in leveraging its soft power vis-à-vis a strident Trump, not ready to bend - at least for now. Thirdly, and it relates to the messaging, Trump's policies on tariffs and conflict are radiating with a "sobering" effect on the smaller and weaker stakeholders across the globe. And one wonders if the Independence Day felicitations from the traditionally pro-India and anti-Taliban NRF, a successor to the Northern Alliance, also flow from President Trump's indirect messaging. The unprecedented NRF message (congratulations to Pakistan and its people on the occasion of the country's Independence Day) comes in the context of an argument that present Taliban government leaders often peddle in private; Northern Afghan groups would brand us as "pro-Pakistan if we shunned the historical Afghan position on the border issue." It is worth recalling that when the US launched its bombing of Kabul on October 7, 2001, in the aftermath of the 9/11 terror attacks in New York and Washington, their partner on the ground was Masood's Shoorae Nazar, then led by Marshal Faheem. Masood had been assassinated by Al-Qaeda militants disguised as journalists in his native Takhar province only two days before the 9/11 attacks. The entire politics of Shoorae Nazar was anti-Pakistan, pro-India, and they had always leveled allegations that sounded like coming from India. Most of their leaders lived in India before and after the 9/11 attacks. Even Masood Khalili, who was injured in the attack on Ahmed Shah Masood, was taken to India for treatment. It is nothing but ironic that following decades of acrimonious posturing, the successor to Shoorae Nazar — NRF — has extended an olive branch to Islamabad through an encouraging Independence Day message. Now that the late Ahmed Shah Masood's son has formally congratulated Pakistan, Taliban Foreign Minister Amir Khan Muttaqi also sent similar greetings to his Pakistani counterpart, Ishaq Dar, according to an official announcement from Muttaqi's office. The exchange of greetings also coincided with the celebration of "Victory Day" — when the Taliban regained power in Afghanistan on a Sunday, August 15, four years ago. Does the festive mood - a mix of hope and goodwill — around Pakistan's Independence Day, Afghanistan's "Victory Day", followed by the Afghan Independence Day on August 19 coupled with positive messaging from the NRF offer a chance to Afghans in general and to the Taliban regime in particular to build on their expression of goodwill for Pakistan? Can the development help Afghans embrace the reality of Pakistan as it has existed since 1947, abandon the old clichéd narratives that often belittle and accuse it of treating Afghanistan as a colony, and move on in favour of an equal-footed cordial relationship between the two uneasy neighbouring countries? Have the winds of change begun blowing to improve Pak-Afghan relations, or should the NRF felicitation gesture signal something ominous to Pakistan, particularly at a time when both China and Russia have courted the Taliban leadership, with Moscow recognising the Kabul regime to the displeasure of the Trump administration? How would Taliban leaders view the recently concluded Pakistan-Tajikistan Counter-Terrorism Exercises Dosti-ll (August 4-9) in a country that historically served as the base for Shoorae Nazar during the anti-Soviet jihad? Dushanbe, the capital, also symbolised the shelter and support (including from India) to Ahmed Shah Masood's militia in its fight against the Taliban until the 9/11 events, and continues to be the hub of NRF activities.
Business Recorder
5 hours ago
- Business Recorder
SBP-held foreign exchange reserves increase $11mn to $14.24bn
Foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $11 million on a weekly basis, clocking in at $14.24 billion as of August 8, data released on Friday showed. Total liquid foreign reserves held by the country stood at $19.49 billion. Net foreign reserves held by commercial banks stood at $5.25 billion. The central bank did not attribute any reason to the increase in the FX reserves. 'During the week ended on 08-Aug-2025, SBP reserves increased by US$ 11 million to US$ 14,243.2 million,' it said. Last week, SBP foreign exchange reserves decreased by $72 million. The SBP purchased $7.23 billion from domestic foreign exchange markets between June 2024 and April 2025, as per central bank data made available last month.
Business Recorder
6 hours ago
- Business Recorder
SBP issues Rs75 commemorative coin to celebrate Marka-e-Haq, Independence Day
The State Bank of Pakistan (SBP) issued on Friday a commemorative coin of Rs75 to celebrate Marka-e-Haq - a military campaign against India in May - and the country's Independence Day. 'To honor the valor of our armed forces during the Marka-e-Haq and to celebrate Independence Day with due dignity, the federal government is pleased to issue a commemorative coin of Rs75 denomination,' SBP statement read. How Pakistan shot down India's cutting-edge fighter using Chinese gear Marka-e-Haq is the official name given to the broader conflict with India from July 22 to May 10 this year, while Bunyanum Marsoos is the name given to the operation on May 10. The metal composition, shape, and dimensions of the coin are: Metal composition: Nickel-Brass, Cu 79%, Zn 20% & Ni 1% Dimension: 30.0 mm Weight: 13.5 grams Obverse On the obverse side of the coin, the waxing crescent moon and five-pointed star facing North-West in rising position is in the center. Alongwith periphery on the top of the crescent star is inscribed in wording 'ISLAMI JAMHURIA PAKISTAN' in Urdu script. Below the crescent and on the top of two springs of wheat with arms curved upward, there is the year of issuance 2025. The face value of coin in numeral '75' in bold letters and RUPIA in Urdu script are written on the right and left sides of the crescent star respectively, according to the SBP statement. Reverse On the reverse side of the coin, wordings 'MARKA-E-HAQ' in Urdu script and '2025' in numeral are inscribed in the center. The wordings 'PAKISTAN HAMESHA ZINDABAD' in Urdu script is written alongwith the periphery on the top side of the coin. Two Fighter Aircrafts (shown on right & left sides of the coin), one Naval Ship and one Multiple Rocket Launcher System (MRLS) are shown on the reverse side of the coin. 'The coin shall be issued through the exchange counters of all the field offices of SBP Banking Services Corporation from August 15, 2025,' the central bank said.
