Pakistan’s economy has crossed a major milestone as the country’s foreign exchange reserves climbed to their highest level since March 2022, signaling a shift toward stability after years of external pressure.
According to the latest official data, Pakistan’s total foreign exchange reserves have reached $21.1 billion, marking their strongest position in more than three years. Economic analysts say the surge reflects sustainable growth and growing investor confidence in the country’s economic leadership.
Central bank reserves show sharp recovery
Out of the total reserves, holdings of the State Bank of Pakistan stand at $15.9 billion. This represents a dramatic recovery from 2023, when central bank reserves had fallen to just $2.9 billion.
🇵🇰 Pakistan’s Forex Reserves Highest Since March 2022
— Khurram Schehzad (@kschehzad) December 21, 2025
Quality Over Quantity: Forex Reserves Rise, Import Cover Improves - Without Debt Buildup/Decline in Foreign Debt-GDP in 2022-2025 vs 2015-2022.
Pakistan’s foreign exchange reserves have reached their highest level since… pic.twitter.com/IuMm1QkLcc
A nearly 5.5-fold increase in domestic reserves has been recorded compared to 2023, underlining the scale of the turnaround.
The improvement in reserves has directly strengthened Pakistan’s import capacity, which has now exceeded 2.6 months. This is a sharp contrast to February 2023, when import cover had dropped to less than two weeks, raising serious concerns about external solvency.
Experts say growth driven by confidence
Economic experts stress that the rise in reserves has been driven by domestic economic growth and renewed confidence, rather than short-term borrowing or temporary financial arrangements. Analysts note that the current buildup reflects a clear and sustained recovery, not artificial support.
According to data, Pakistan’s external debt-to-GDP ratio has declined from 31% to 26%, signaling improved fiscal discipline. Economists say the gradual slowdown in external debt acquisition reflects reform measures and better financial management.
Forward liabilities cut, future pressure reduced
Another key development is a 65% reduction in forward foreign exchange liabilities, significantly easing future repayment pressures. Experts view this as a critical step in strengthening the country’s external financial position.
Between 2015 and 2022, Pakistan’s debt continued to rise while foreign exchange reserves steadily declined. However, the trend has reversed since 2022, with reserves increasing rapidly and the debt-to-GDP ratio falling simultaneously.
Key indicators point to economic stability
Economists say this progress sends several strong signals, including reduced external economic vulnerability, stronger reserve buffers, rising business confidence, and improving macroeconomic stability. These indicators suggest a more resilient economic foundation.
Analysts emphasize that the recent rise in foreign exchange reserves is not merely a numerical improvement, but evidence of a qualitative shift in economic policy. Pakistan, they say, is moving away from short-term survival strategies based on debt and toward sustainable external economic stability.
