Pakistan hopes to collect up to $4 billion from Middle Eastern commercial banks by the next fiscal year (FY25), according to State Bank of Pakistan (SBP) Governor Jameel Ahmad on Tuesday, as the country seeks to close external financial shortfalls.
In his first interview with a media organization since taking office in 2022, SBP Governor Jameel Ahmad stated that Pakistan was also in the “advanced stages” of securing $2 billion in extra external financing required for International Monetary Fund (IMF) approvals of the $7-billion bailout project.
In July, Pakistan and the IMF achieved a staff-level agreement on the loan package, subject to approval from the lender’s executive board and “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”.
When questioned about monetary policy, Ahmad said that Pakistan’s recent interest rate reductions have had the intended impact, since the country’s current account is still under control and inflation is still slowing down.
After peaking at over 30% in 2023, Pakistan’s annual consumer price index inflation dropped to 11.1% in July.
Ahmad stated, “The Monetary Policy Committee will review all these developments,” and that future rate decisions could not be predetermined.
The central bank of Pakistan lowered interest rates for two consecutive sessions, from a record high of 22% to 19.5%. On September 12, they will meet once again to discuss monetary policy.
“Now that jobs and other socioeconomic issues are at stake, we must concentrate on growth and other related areas,” Ahmad stated.
The central bank’s job, he said, was to maintain price and financial stability before turning its attention to expansion.