Pakistan seeks $4b from ME banks

Pakistan is seeking external financing to tackle its economic issues. State Bank of Pakistan Governor Jameel Ahmad stated that the country plans to secure $4 billion from Middle Eastern commercial banks by the end of the next fiscal year.

Governor Ahmad disclosed to Reuters that Pakistan is close to finalising a $2 billion external financing deal, a key step for the International Monetary Fund (IMF) to greenlight the country’s $7 billion bailout programme.

The IMF and Pakistan reached a preliminary agreement on this loan programme in July, subject to the IMF’s executive board approval and Pakistan’s confirmation of necessary financing assurances from its development and bilateral partners.

Regarding monetary policy, Ahmad expressed satisfaction with the recent interest rate cuts. These reductions have contributed to a decline in inflation and have helped maintain control over the current account deficit.

Pakistan’s annual consumer price index inflation decreased to 11.1 per cent in July from its peak of over 30 per cent in 2023.

The State Bank of Pakistan’s Monetary Policy Committee will carefully assess these developments to determine future rate decisions.

While the committee has already reduced rates twice, from a historic high of 22 per cent to 19.5 per cent, the next meeting on September 12 will provide an opportunity to further evaluate the economic landscape.

Attribution: Reuters

Subediting: M. S. Salama