SBP Reserves Increase to $10.33 Billion as of May 2

The State Bank of Pakistan (SBP) reported a $118.1 million increase in its foreign exchange reserves, reaching $10.33 billion as of May 2, 2025, a 1.16% week-on-week rise, signaling economic stabilization with significant tax implications for businesses. Our tax law firm advises clients to prepare for Federal Board of Revenue (FBR) scrutiny amid this reserve growth.

This two-week upward trend, following a $9 million rise the prior week, offsets an earlier $367 million drop in April—a seven-month low—totaling a $127 million gain, per the text and posts on X from @brecordernews. While overall reserves hit $15.48 billion, the SBP’s fiscal year-to-date reserves are up $943 million, though down $1.38 billion calendar year-to-date. Web sources like Profit by Pakistan Today project SBP reserves nearing $13 billion by June 2025, driven by IMF inflows, reflecting improved confidence.

From a tax law perspective, bolstered SBP reserves may stabilize the rupee, impacting customs duties under Section 25 of the Customs Act for importers, potentially easing input tax credits under Section 8B of the Sales Tax Act, 1990. Foreign transactions face withholding tax (WHT) at 15% on foreign payments under Section 6 of the Income Tax Ordinance, with FBR audits likely to target currency gains. Export firms may see taxable income adjustments under Section 29, requiring strict reporting.

Critically, the narrative of “stability” may downplay risks—web context from Reuters highlights external debt pressures, and posts on X note SBP reserves cover only 2.9 months of imports, below the 3-month safety threshold, signaling potential tax volatility. Clients should remain vigilant.

Our firm advises clients to monitor currency impacts, ensure WHT compliance, and prepare for FBR audits, navigating this evolving fiscal landscape.