KARACHI: The central bank expects its foreign exchange reserves to meet the target of $18 billion set for June, despite making substantial repayments of $3.5 billion to the United Arab Emirates (UAE) and $1.3 billion for a Eurobond. However, remittances are now expected to reach $41 billion, a decrease from the earlier estimate of $42 billion.
“Despite significant debt repayments, the SBP’s FX reserves as of April 24, 2026, are around $15.8 billion, supported by the issuance of Eurobonds, as Pakistan re-entered international capital markets after a gap of over four years,” the State Bank of Pakistan said in the statement following the monetary policy meeting.
“Lastly, the staff-level agreement was reached with the IMF on March 27, 2026,” it added. The consecutive surpluses in February and March led to a small cumulative current account surplus during July-March FY26, the SBP said. This was mainly supported by resilient workers’ remittances. Accordingly, the current account in FY26 is now likely to remain closer to the lower bound of the earlier projected range, despite a challenging external environment, including a significant worsening of terms-of-trade, it added.
“On the financing side, the government has proactively raised external financing via enhanced bilateral arrangements and issuance of Eurobonds, which cushioned the impact of the recent debt and liability repayments on the SBP’s FX reserves,” the central bank said.
“In this regard, the SBP’s FX reserves are now assessed to reach above $18 billion by June 2026,” it said.“Going forward, the committee emphasised the need for further strengthening in FX buffers amidst the uncertain global economic conditions.”
Governor SBP Jameel Ahmad told analysts that despite the current situation, annual remittances could still touch $41 billion, albeit down $1 billion from earlier expectations of $42 billion. For April 2026, the SBP expects remittances to largely remain at previous averages.
According to the SBP, overall, for FY26, the debt repayments were $25.4 billion; out of this, $21.2 billion is either settled or rolled over. For the remainder of the period, $2.7 billion is expected to be further rolled over, while the repayable amount is $1.5 billion, said Topline Securities, citing the SBP’s governor.
