Pakistan’s foreign exchange reserves are expected to increase by $3.5 billion by June 2027, reaching $25 billion from around $21.5 billion currently, State Bank of Pakistan (SBP) Governor Jameel Ahmed has said.

Ahmed shared the projection on Monday at a press conference following the central bank’s monetary policy announcement, in which it raised the policy rate by 50 basis points to 12 percent.

SBP Targets $23 Billion by December

The central bank expects its foreign exchange reserves to reach $23 billion by December 2026 before rising to $25 billion by June 2027.

Ahmed said the reserve recovery had largely been supported by the SBP’s purchases of dollars from the market rather than fresh borrowing. Pakistan’s reserves had fallen below $3 billion in February 2023 before beginning to recover.

The latest target comes after SBP reserves stood just below $22 billion last week.

The governor emphasized that continued reserve accumulation was important for maintaining economic stability and strengthening the country’s external position.

Economic Growth Forecast at 3.5 to 4.5 Percent

The SBP expects Pakistan’s economy to grow between 3.5 and 4.5 percent during the current fiscal year.

The policy rate increase, from 11.5 percent to 12 percent, came amid persistent inflationary pressures, higher energy prices and concerns that geopolitical tensions could push global commodity prices upward.

The central bank said the worsening inflation outlook and the need to keep inflation expectations under control were behind the rate decision.

Risks Could Affect Reserve Target

The reserve projections remain exposed to external risks, including high global commodity prices, tighter international financial conditions and supply disruptions.

These factors could put pressure on Pakistan’s external account and affect the pace of reserve accumulation over the coming months.