Foreign Exchange Reserves and Import Cover
Foreign exchange (forex) reserves are liquid assets held by a country's central bank — typically in foreign currencies, gold, SDRs (Special Drawing Rights), and reserve position at the IMF — that can be used to meet external payment obligations and stabilise the exchange rate. "Import cover" (or "months of import cover") measures how many months a country could finance its imports solely from existing forex reserves if all other inflows ceased. It is a critical metric used by the IMF, rating agencies, and investors to assess external sector health.
- The IMF typically recommends a minimum of 3 months of import cover as an adequacy threshold for developing economies
- Pakistan's import cover had fallen below 1 month during the 2022–23 crisis (reserves at approximately $3 billion), a near-sovereign-default scenario
- Post-Saudi support, Pakistan targets approximately $18 billion in reserves — approximately 3.3 months of import cover, in line with its Extended Fund Facility (EFF) commitments to the IMF
- India maintains significantly higher forex reserves (over $600 billion as of early 2026), providing approximately 11 months of import cover
● Tracked since April 15, 2026 · last seen August 02, 2026 · updates as the daily brief publishes
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