The State Bank of Pakistan (SBP) anticipates posting a profit of Rs2.4 trillion for the fiscal year ending June 2025, aligning with the government’s expectations. This figure, though substantial, is lower than the record Rs3.42 trillion earned in the previous fiscal year (FY24), largely due to elevated interest rates and significant exchange rate gains.
Speaking to analysts during a post-policy briefing, SBP Governor Jameel Ahmad confirmed that the central bank is on track to meet the profit target. He also noted that, in accordance with the amended SBP Act of 2022, these profits will now be transferred to the government annually—after board approval and audit—rather than on a quarterly basis. The funds are already accounted for in the FY26 federal budget.
On the monetary policy front, the SBP recently decided to keep the key interest rate steady at 11%, citing inflation risks and increased geopolitical uncertainty, particularly due to escalating tensions between Israel and Iran. In May, the SBP had reduced the rate by 100 basis points to 11% after observing consistent disinflationary trends.
Looking ahead, the SBP views the 4.2% GDP growth target for FY26 as achievable but challenging, especially given concerns in the agricultural sector. Growth, it says, will primarily be fueled by industrial and services sectors, bolstered by higher imports, improving auto sales, better capacity utilization, and a PMI that has remained above 50 since December 2024.
The central bank is set to release its independent economic outlook in July, covering GDP, inflation, the current account, and foreign exchange reserves. While the SBP does not set numerical economic targets, its assessments are grounded in data and evidence.
Regarding external obligations, Governor Ahmad stated that $25.8 billion in repayments were due in FY25, most of which have been paid or rolled over. Only $400 million remains outstanding and is expected to be cleared in the next two weeks. For FY26, external repayments are projected to be at a similar level, with detailed information to be released during the upcoming Monetary Policy Committee meeting by late July.
The SBP aims to maintain foreign exchange reserves at approximately $14 billion by the end of June 2025. A current account surplus is also projected for FY25, indicating stronger external sector stability as Pakistan heads into the next fiscal year.
Remittance inflows are expected to hit $38 billion this fiscal year—up from $31.3 billion in FY24. This surge is primarily attributed to a shift from informal to formal channels. The SBP, in coordination with banks and the federal government, is working on incentives to sustain this trend.
In terms of liquidity management, the SBP noted a temporary increase in open market operations (OMO), attributed to higher cash demand during Eid and a time lag between debt repayments and incoming funds. OMO levels are expected to ease in the coming weeks as fresh inflows stabilize the system.
The SBP also confirmed it remains on track to meet its net international reserves (NIR) target for June under the International Monetary Fund (IMF) programme, having already exceeded the December 2024 benchmark.
