Pakistan’s foreign exchange reserves recorded a notable increase in the last week of April, offering some relief after months of pressure on the external account.
Data released by the State Bank of Pakistan showed that reserves held by the central bank rose by $730.3 million, or 4.84 percent, during the week ended April 24. This pushed the SBP’s total to $15.83 billion.
The rise was mainly driven by proceeds from a Pakistan eurobond, which helped strengthen the country’s reserve position. Analysts see this as a positive signal, especially as Pakistan continues efforts to stabilise its external finances.
The country’s overall reserves also moved up during the week. Total holdings increased by $640.5 million, or 3.1 percent, to reach $21.27 billion. However, reserves held by commercial banks declined by $89.8 million, or 1.62 percent, settling at $5.44 billion.
Market watchers expect reserves to improve further in the coming weeks. Attention is now on the International Monetary Fund’s executive board meeting scheduled for May 8, where a $1.2 billion tranche is expected to be approved. If cleared, the inflow could provide additional support to Pakistan’s external position and ease pressure on the rupee.
Remuneration rate slightly adjusted
In a separate development, the State Bank of Pakistan has marginally reduced the rate of return on the Special Cash Reserve Account maintained in US dollars.
The central bank said the rate for May 2026 has been set at 2.65 percent, slightly lower than 2.66 percent in April and 2.67 percent in March. The rate applies to deposits mobilised under FE Circular 25 of 1998.
Under existing rules, banks and non bank financial institutions are required to hold reserves equal to 25 percent of their foreign currency deposits with the SBP. This includes 5 percent kept in a non remunerative cash reserve account and 20 percent in a special cash reserve account that earns a monthly return.
The SBP calculates this return using the one month Term Secured Overnight Financing Rate, known as SOFR, published at the end of the previous month, with a 1 percent service charge deducted.
The slight adjustment reflects movements in global benchmark rates and shows how the central bank is aligning its policies with international financial conditions.
Read next: Pakistan’s foreign reserves post modest weekly increase
