The foreign exchange reserves held by the State Bank of Pakistan (SBP) slipped to $11.1 billion on March 7 from $11.25bn at the end of February, the latest data reveals. Total forex reserves, including those held by the commercial banks, however, rose to about $15.93bn from around $15.87bn.

Despite impressive growth in remittances throughout this fiscal year, SBP’s forex reserves have remained on the decline for some time due largely to external debt payments.

The central bank’s reserves peaked at $12.04bn in November before falling to $11.73bn at the end of the last calendar year. Since then, the SBP’s reserves have remained under pressure and are now at their lowest level of $11.1bn as of March 7, 2025.

The amount is insufficient to cover three months of the country’s merchandise import bill — a level generally considered the bare minimum. Monthly goods imports consumed $4.3bn in February, an increase of 10 per cent in a year.

As policymakers navigate IMF negotiations and fiscal adjustments, remittances remain a crucial pillar of economic support

Since imports are growing fast with the economy showing signs of recovery and exports’ growth falling below expectations, the resultant widening of the trade deficit is also putting pressure on the forex reserves.

In effect, it is also weakening the impact of an impressive growth in home remittances; between July 2024 and February 2025, Pakistan booked a merchandise trade deficit of $15.78bn, up from $14.84bn, as seen in the........

© Dawn Business