Karachi: The State Bank of Pakistan (SBP) expects the country’s foreign exchange reserves to rise to USD 17.5 billion by the end of the fiscal year 2025-26, despite substantial external debt repayments scheduled during the period, according to SBP Governor Jameel Ahmad.
Speaking at the monetary policy press conference on Wednesday, Ahmad said the anticipated increase of USD 3 billion in FX reserves—up from USD 14.5 billion at the close of FY25—would occur alongside debt repayments and rollovers totaling USD 25.9 billion.
The SBP chief noted that reserves could exceed the targeted USD 17.5 billion if Pakistan successfully taps global capital markets through the issuance of Eurobonds.
In the same briefing, the central bank announced that it would maintain the key policy rate at 11%, citing a stable outlook for inflation and external accounts.
Ahmad also projected that Pakistan’s economy would grow between 3.25% and 4.25% in FY26, supported by a rebound in agriculture and continued gains in the industrial and services sectors. The projection aligns closely with the International Monetary Fund’s (IMF) forecast of 3.6% GDP growth for the same period.
The current account, which posted a surplus in FY25, is expected to move into a deficit ranging between 0% and 1% of GDP in FY26, largely due to rising import demand as economic activity recovers.
On the inflation front, the SBP’s Monetary Policy Committee (MPC) forecasted that year-on-year inflation would mostly stay within the 5–7% range, although it could temporarily exceed this band due to external and domestic shocks.
The MPC cautioned that the outlook remains vulnerable to several risks, including global commodity price volatility, adverse trade developments, unexpected hikes in administered energy prices, and weather-related disruptions such as widespread flooding.
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