In the interview, the Governor of the State Bank of Pakistan (SBP) provided updates on Pakistan’s financial situation and economic policy. Key points include:
1. External Financing and IMF Bailout Program: Pakistan is in advanced stages of securing $2 billion in additional external financing necessary for the International Monetary Fund’s (IMF) approval of a $7 billion bailout program. The government has also requested an extra $1.2 billion loan from Saudi Arabia to address a $2 billion financing gap.
2.IMF Approval Process: While an agreement on the loan program was reached in July, approval from the IMF’s executive board depends on obtaining “timely confirmation of necessary financing assurances” from Pakistan’s development and bilateral partners. The IMF’s Executive Board is scheduled to discuss Pakistan’s case on September 4, 2024.
3. Monetary Policy and Inflation: Recent interest rate cuts in Pakistan have achieved their intended effect, with inflation slowing and the current account remaining controlled. The annual consumer price index inflation fell to 11.1% in July from over 30% in 2023. The central bank cut rates from 22% to 19.5% in its last two meetings, and future decisions on rates will be reviewed by the Monetary Policy Committee, with the next review scheduled for September 12.
4.Focus on Growth: Moving forward, the SBP will also focus on economic growth and job creation, balancing these goals with its mandate to ensure price and financial stability.
These updates reflect Pakistan’s ongoing efforts to stabilize its economy and secure crucial financial support amid complex economic challenges.k
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