How $17 billion in forex reserves is strengthening Pakistan’s economy
Dubai: Pakistan’s foreign exchange reserves have climbed to about $17 billion, strengthening its ability to meet overseas payments and withstand external shocks as lower borrowing costs ease pressure on government finances. The improvement prompted Moody’s Ratings to upgrade Pakistan’s local and foreign currency sovereign ratings to B3 from Caa1. The agency maintained a stable outlook, signalling…
Pakistan's foreign exchange reserves have surged to approximately $17 billion, bolstering its capacity to handle international obligations and withstand external shocks, according to a report by Moody's Ratings. This increase, from $14 billion at the end of July 2025, provides the nation with a reserve buffer of nearly three months for imports, mitigating the impact of higher commodity prices and global financing challenges.
The agency maintained a stable outlook, projecting reserves to reach between $19 billion and $21 billion by fiscal 2028, contingent on the continuation of IMF-supported reforms. As a result, Pakistan's credit profile has shown enhanced resilience over recent economic cycles, particularly in the context of the Middle East conflict.
The improvement is attributed to higher reserves, a stable exchange rate, and declining inflation, which collectively enhance the nation's ability to absorb external shocks.
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