Pakistan’s foreign exchange buffers strengthened sharply during the week ended May 15, 2026, as the State Bank of Pakistan’s (SBP) reserves increased $1.214 billion to $17.081 billion, driven primarily by multilateral inflows and recent market-based external borrowing.

According to official data, the jump in reserves was largely attributed to receipts from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), alongside proceeds from Pakistan’s inaugural Panda Bond issuance in China’s domestic bond market, although there were some external debt repayments as well.

With this increase, the country’s total liquid foreign exchange reserves stood at $22.6 billion. Of this, the reserves held by commercial banks amounted to $5.5 billion, while the SBP-held reserves accounted for the bulk at $17.08 billion.

The latest improvement underscores continued reliance on external financing channels to stabilise Pakistan’s external account position, even as debt servicing obligations remain a persistent outflow pressure.

Furthermore, the Pakistani rupee kept its upward streak intact by posting a marginal gain against the US dollar in the interbank market on Thursday. It settled at Rs278.55 with a Rs0.01 appreciation compared with Wednesday’s close at 278.56.

Meanwhile, gold prices in Pakistan rose sharply despite a weakening trend in the international bullion market, reflecting a lagged adjustment in the domestic market and heightened volatility in global commodities.

According to the All-Pakistan Gems and Jewellers Sarafa Association, the gold price per tola increased Rs5,000 to close at Rs475,362. Similarly, the price of 10-gram gold rose Rs4,287 to settle at Rs407,546. Silver prices rose Rs60 to Rs8,034 per tola.

This came after a sharp decline a day earlier when per-tola gold had dropped by Rs6,800 to Rs470,362.

Internationally, spot gold slipped 0.8% to $4,508.04 per ounce, after briefly falling 1% earlier in the session, as rising oil prices fuelled inflation concerns and strengthened expectations of further US rate hikes, according to Reuters. The dollar and US Treasury yields also firmed, adding pressure on bullion.

However, the market saw brief support in the previous session, when gold gained over 1% during US trading hours after touching its lowest level since March 30.

Market participants said volatility remains elevated amid geopolitical and macroeconomic uncertainty. Oil prices climbed over 2%, while reports of Iran issuing directives related to near-weapons-grade uranium further unsettled sentiment. Traders are now pricing in a 58% probability of at least one US rate hike by the end of 2026.

Interactive Commodities Director Adnan Agar noted that gold traded between $4,458 and $4,570 during the day, and was later hovering around $4,510-4,520.

He said the market remains in consolidation, adding that any progress on US-Iran negotiations could weigh on prices. However, he maintained that gold faces strong support in the $4,100-4,200 range, from where a rebound is likely.