KARACHI: Pakistan’s central bank governor said on Friday improved foreign exchange buffers and a more stable market environment had enabled the State Bank of Pakistan (SBP) to purchase $20 billion from the interbank market over the past three years to rebuild reserves and strengthen its capacity to absorb external shocks.
Governor Jameel Ahmad told senior executives from global financial and investment institutions on the sidelines of the IMF-World Bank Annual Meetings in Washington the SBP’s strategy to reform exchange companies and promote remittances through formal channels had stabilized the market, allowing Pakistan to increase its foreign reserves nearly five-fold since February 2023.
“SBP has improved the stability and transparency of the FX market through structural reforms in exchange companies and the promotion of remittances through formal channels,” Ahmad said, according to an official statement. “These efforts have brought stability in the FX market, allowing SBP to strategically purchase $20 billion during the last three years from the interbank market to build its FX reserves.”
He added that the central bank now aims to raise foreign exchange reserves to $17.5 billion by June 2026, emphasizing that the stronger position reflects SBP’s focus on building buffers “to withstand external shocks.”
Ahmad said headline inflation had declined sharply to 5.6 percent in September 2025, down from over 25 percent two years earlier, while core inflation had fallen below 8 percent. Despite flood-related disruptions, he projected inflation would stabilize within the 5-7 percent range in the medium term.
Pakistan’s economy grew by 3 percent in FY25, the SBP governor said, and growth in FY26 was expected to remain between 3.25 and 4.25 percent.
He added that policy consistency and fiscal discipline had created space for structural reforms, enabling Pakistan to pursue “sustainable growth and socioeconomic uplift” with support from multilateral partners such as the IMF and World Bank.
