Forex Reserves Will Rise Faster This Year: SBP Governor

State Bank of Pakistan (SBP) Governor Jameel Ahmad said Pakistan’s external debt servicing is expected to decline to $21.5 billion in FY27 from $26.5 billion in FY26 (↓19 percent).

Speaking at today’s post-monetary policy press conference, the SBP governor also said the expected increase in forex reserves this year will be higher than the increase witnessed in the previous 1-2 years.

He said the total debt servicing includes $3.5 billion in interest payments, down from $4 billion last year, while the remaining $18 billion relates to principal repayments.

Of that amount, $10 billion to $11 billion is expected to be rolled over or refinanced, reducing Pakistan’s net repayment requirement to around $7.5 billion, compared with $11 billion in FY26.

The governor said nearly $6 billion of the expected rollover requirement has already been secured in July 2026. He also reaffirmed the central bank’s target of increasing foreign exchange reserves to $20.2 billion by December 2026.

SBP expects reserve accumulation to accelerate this fiscal year as its forward liabilities have declined sharply to $0.9 billion from $5 billion in June 2022. The governor said the central bank’s priority is now to build reserves and transition from being a net borrower to becoming a net lender in the foreign exchange market.

He added that the recent decline in reserves was due to a $1.4 billion refinancing payment, which is expected to return within the next few weeks.

The central bank also projected workers’ remittances to rise to $44 billion in FY27, up from $41.6 billion in FY26, despite concerns that the Middle East conflict could affect inflows. On the trade front, the SBP expects exports to improve, supported by a recovery in rice exports after their decline during the previous fiscal year.