SBP reserves rise to $16.4bn, gold drops sharply
Pakistan’s foreign reserves edged higher while gold prices fell steeply in the local market despite gains in global bullion, reflecting currency stability and market volatility.
Pakistan’s foreign exchange reserves held by the State Bank of Pakistan increased slightly by $19m on a weekly basis to reach $16.4bn, according to official data released on Thursday. The rise signals continued external stability amid cautious macroeconomic management.
Read More: Rupee inches up against US dollar
The country’s total liquid foreign reserves stood at $21.89bn, providing a buffer against external financing pressures. Of this, $16.4bn was held by the central bank, while $5.5bn remained with commercial banks. The improvement reflects steady inflows and controlled external outflows, according to recent State Bank disclosures.
Pakistan’s reserves have recovered significantly from critically low levels seen in early 2023, when holdings fell below $4bn, covering barely one month of imports. According to the State Bank of Pakistan’s FY2025 annual report, reserves have improved due to multilateral inflows, tighter import controls, and a narrower current account deficit.
The Pakistani rupee showed marginal appreciation in the inter-bank market, gaining Rs0.03 to close at 279.02 against the US dollar. The slight uptick followed a pause in global dollar strength, as investors reassessed the outlook for US monetary policy.
Currency stability has been supported by improved external account management and steady remittance inflows. The current account deficit narrowed sharply during FY2025, according to central bank data, as import compression and export resilience helped ease pressure on the balance of payments.
Meanwhile, gold prices in Pakistan declined sharply, diverging from trends in international markets where bullion prices moved higher. In the local market, the price of gold per tola dropped by Rs9,500 to Rs494,662, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association.
Similarly, the price of 10 grams of gold fell by Rs8,145 to Rs424,092, reflecting a strong correction after the previous session’s surge. Gold had climbed to Rs504,162 per tola a day earlier following a sharp increase of Rs15,700, highlighting significant volatility in domestic bullion markets.
Silver prices also followed a downward trajectory, declining by Rs300 to Rs7,884 per tola in the local market. Analysts attribute the drop in domestic bullion prices to currency stability and profit-taking after recent record highs.
In contrast, international gold prices rose amid a weaker US dollar and heightened geopolitical uncertainty. Spot gold gained around 1.7% to trade near $4,796 per ounce, while US gold futures increased to about $4,823 per ounce during early trading.
However, global bullion prices later showed signs of correction, falling by $95 to $4,723 per ounce, including a $20 premium. The intra-day volatility reflects uncertainty among investors regarding geopolitical developments and the future path of US interest rates.
Market participants remained cautious as they assessed the durability of a fragile ceasefire between Washington and Tehran. Ongoing tensions in the Middle East have continued to drive safe-haven demand for gold while also influencing energy markets.
Recent US inflation data has further complicated the outlook. The Personal Consumption Expenditures index, a key gauge tracked by the Federal Reserve, showed an uptick in February, raising concerns about the pace of future rate cuts. Investors are also awaiting US Consumer Price Index data for further direction.
Adnan Agar, director at Interactive Commodities, said gold remains range-bound with limited upside unless key resistance levels are breached. He noted that prices fluctuated between $4,700 and $4,800 per ounce, indicating weak directional momentum in the short term.
He added that geopolitical developments in the Middle East, including reported Israeli strikes in Lebanon and emerging diplomatic talks, could influence commodity markets. Upcoming discussions involving the United States and Iran are also being closely watched by investors.
Agar said a sustained ceasefire could ease pressure on oil and gas prices, potentially stabilizing broader commodity markets. Conversely, failure in negotiations may increase volatility and weigh on investor sentiment across global markets.
Pakistan’s economic outlook remains closely tied to external sector stability and global commodity trends. According to the Ministry of Finance’s latest economic update, maintaining adequate foreign exchange reserves is critical for meeting external obligations and supporting currency stability.
The State Bank has emphasized the importance of continued policy discipline, including prudent monetary management and exchange rate flexibility. Analysts say sustained inflows from exports, remittances, and multilateral lenders will remain key to preserving reserve adequacy.
With reserves gradually strengthening and the rupee stabilizing, Pakistan has gained some breathing space in managing external vulnerabilities. However, global uncertainties and commodity price fluctuations continue to pose risks to the outlook.
The State Bank of Pakistan’s reserve position will remain a key indicator of economic stability as Pakistan navigates ongoing external challenges and seeks to sustain recovery momentum.