#Liquidity101
As of June 5, 2025, Pakistan's liquidity situation shows both improvements and ongoing challenges. The State Bank of Pakistan has injected Rs2.54 trillion into banks through open market operations to ease liquidity pressure and support economic activity. Meanwhile, cash in circulation has risen to around Rs9.4 trillion, showing a higher public preference for physical currency. On the external side, foreign exchange reserves have increased to $11.15 billion, bringing the total liquid reserves to $16.02 billion. This is partly due to foreign exchange interventions totaling $3.8 billion over the past five months to strengthen reserves and manage debt payments. However, Pakistan still faces high external financing needs, with over $22 billion in repayments due in fiscal year 2025. Domestically, government debt has grown by Rs2.5 trillion in just six months, reaching Rs50.193 trillion by the end of 2024. To stay on track, Pakistan must continue with economic reforms, manage spending, and boost revenue to ensure long-term financial stability.
