Monthly increase in foreign currency deposits records

Foreign currency deposits in Pakistan’s banking system increased in August. According to the latest data from the State Bank, total foreign currency deposits increased by $69.39 million on a monthly basis to reach $6.935 billion.

Banks had foreign currency deposits of $6.866 billion in July. The increase in August is about one percent.

This improvement comes at a time when the availability of foreign exchange is an important part of economic stability for Pakistan. Foreign currency held by banks plays an important role in business payments and other financial needs.

The data also highlighted deposits of local and non-resident individuals separately. In August, foreign currency deposits of local individuals and institutions stood at $5.865 billion.

Local deposits increased by $13.79 million compared to July. This is an improvement of about 0.24 percent month-on-month.

However, the picture of local deposits on an annual basis was different. In August 2025, this amount was $6.108 billion. In comparison, local deposits in August this year were $242.75 million lower.

Deposits of non-resident Pakistanis and other non-residents increased more significantly. In August, deposits of this sector reached $1.070 billion.

In July, deposits of non-residents were $1.014 billion. Thus, an increase of $55.60 million or 5.48 percent was recorded in a month.

The aggregate data shows that non-resident deposits played a significant role in the monthly improvement in August. The increase in local deposits remained limited during this period.

However, on an annual basis, total foreign currency deposits are still below the level of the previous year. In August 2025, these deposits were $7.004 billion. Thus, the total amount decreased by $69.69 million or 0.99% in a year.

This difference is important for economists. The monthly increase shows a temporary improvement in the availability of foreign currency in the banking system. The annual decrease indicates that there has been no major change in the overall situation yet.

Foreign currency deposits can be affected by remittances, external earnings, business requirements and expectations regarding the value of the rupee. Therefore, the data in the coming months will provide a clearer picture.

The real importance for Pakistan’s economy is not only the amount of dollars in banks. The direction of external payments, import requirements, remittances and overall foreign exchange reserves is also important.

The increase in non-resident deposits in the recent data is a positive aspect. However, given the annual level of total deposits, it is premature to call this a permanent trend.

If the increase in non-resident deposits continues and local deposits also improve, the overall availability of foreign currency in the banking system could further improve.