Gold Rally Sends SBP Reserves Soaring 20% to Rs2.33 Trillion

KARACHI: Pakistan's central bank just got noticeably richer on paper, and it didn't have to buy a single extra ounce of gold to do it. The State Bank of Pakistan closed fiscal year 2025-26 holding gold reserves worth Rs2.334 trillion, a jump of 20 percent from Rs1.942 trillion a year earlier. The bank booked an unrealised gain of Rs389.074 billion during the year smaller than the Rs591.222 billion windfall of FY25, but still a hefty addition to the national balance sheet.

SBP Gold Reserves Surge

Behind the numbers sits a simple story: gold got expensive, fast. The SBP valued its holdings at the FY26 closing rate of $4,026.05 per troy ounce, up sharply from $3,287.45 a year earlier. Nobody at the bank mined new metal or opened new vaults. The rupee value of the reserves simply moved with the world market, and the world market moved a lot.

Also Read: Gold Prices Crash in Pakistan, Plunge Rs15,100 Per Tola in One Day

Pakistan's central bank doesn't guess at gold prices. It follows a fixed formula. Gold enters the books at cost, based on the market rate at the time of purchase. From there, the SBP revalues its holdings every year using the London Bullion Market Association's closing rate on the last working day of the fiscal year a practice mandated under Section 30(2) of the State Bank of Pakistan Act, 1956.

Any gain or loss from that revaluation doesn't touch the profit and loss account directly. It flows into other comprehensive income first, then lands in equity under a line called "unrealised appreciation on gold reserves." Only when the SBP actually sells gold does a realised gain or loss hit the P&L statement.

The India complication

Not all of Pakistan's gold sits comfortably on Pakistani soil. A portion remains held with the Reserve Bank of India, a legacy arrangement predating decades of frozen bilateral settlements. The SBP treats this gold differently on its books.

Unrealised gains or losses on the India-held gold don't get recognised in the equity statement at all not until the assets are formally transferred to the SBP. Until that transfer happens, and given the state of Pakistan-India relations, "until" could mean a long wait, the unrealised value sits parked under other liabilities, tagged as a provision for doubtful assets.

Why this matters beyond Karachi's banking circles

Gold reserves function as a shock absorber for a central bank under pressure. Rising bullion prices don't fix a current account deficit or lower import bills, but they do fatten the reserves cushion that policymakers point to when foreign confidence gets shaky.

For an economy that has spent recent years negotiating IMF programmes and defending the rupee, a Rs389 billion paper gain isn't small change. It won't build a single road or fund a single subsidy. But on the balance sheet that international lenders and rating agencies scrutinise most closely, it's a number that works in Pakistan's favour for now, at least, as long as gold keeps climbing.