Tag: SBP governor

  • Pakistan eyes up to $4 billion from Middle Eastern banks by 2026, says SBP governor

    Pakistan eyes up to $4 billion from Middle Eastern banks by 2026, says SBP governor

    Pakistan plans to raise up to $4 billion from Middle Eastern commercial banks by the fiscal year 2026, according to the Governor of the State Bank of Pakistan (SBP), Jameel Ahmad.

    In his first interview since assuming office in 2022, Ahmad revealed that Pakistan is also in the final stages of securing an additional $2 billion in external financing, which is essential for the approval of the $7 billion bailout programme from the International Monetary Fund (IMF).

    The IMF and Pakistan reached a preliminary agreement on the loan in July. However, the agreement still needs approval from the IMF’s executive board and confirmation of financing assurances from Pakistan’s development and bilateral partners.

    Ahmad expressed confidence that Pakistan’s financing needs will be met smoothly in the next fiscal year and in the medium term. Historically, Pakistan has depended on long-time allies like China, Saudi Arabia, and the UAE to extend loans rather than demand immediate repayment. Ahmad expects similar support for the next three years, giving the government more time to stabilise its finances.

    Read more: Exchange rates for Tuesday: PKR gains 9.6 paisa against US dollar, 37 paisa against Euro

    He also mentioned that Pakistan’s financing needs might be lower than the 5.5 per cent of GDP projected by the IMF. This is because the country’s external financing requirements have been declining, and the IMF’s projections were based on a higher current account deficit than what has materialised.

    Regarding monetary policy, Ahmad noted that recent interest rate cuts have successfully reduced inflation, which stood at 11.1 per cent in July, down from over 30 per cent in 2023. He emphasized that future interest rate decisions would be based on economic developments. Pakistan’s central bank had reduced interest rates from a record high of 22 per cent to 19.5 per cent and will review its monetary policy again on September 12.

    Ahmad, reflecting on his first year as governor, described it as challenging but expressed optimism that the situation has improved, with a focus now on growth, digitalisation, and financial inclusion.

  • SBP governor says debt rollovers will ease Pakistan’s FY25 financial burden

    SBP governor says debt rollovers will ease Pakistan’s FY25 financial burden

    State Bank of Pakistan (SBP) Governor Jameel Ahmad assured the public on Wednesday that friendly nations will roll over nearly $16 billion of the country’s outstanding debt for the fiscal year 2025.

    This crucial support is expected to provide the government with significant breathing room amid ongoing financial challenges.

    In his testimony before the National Assembly Standing Committee on Finance and Revenue, chaired by MNA Naveed Qamar, Ahmad revealed that Pakistan’s total debt obligations for FY25 amount to $26.2 billion. Following the planned rollovers, the remaining debt to be settled by June next year will be reduced to $10 billion.

    Ahmad also highlighted that the central bank has already repaid $1.5 billion in debt last month, leaving an outstanding amount of $8.5 billion for the rest of the fiscal year.

    Secretary of Finance Imdad Ullah Bosal added that Pakistan is set to receive its first tranche from the International Monetary Fund (IMF) following the rollover of approximately $4 billion in Chinese commercial loans. Additionally, $4.4 billion is expected from the Asian Development Bank and the World Bank.

    The SBP Governor further stated that there is no immediate pressure on external payments, which should contribute to the stability of the Pakistani rupee. He projected that foreign exchange reserves could reach $13 billion by the end of the fiscal year.

    With improved economic conditions, further reductions in the policy rate are anticipated. However, he warned that inflation might rise to 13.5 per cent this fiscal year due to budgetary policies and energy price fluctuations.

    In his presentation, Ahmad outlined a comprehensive five-year plan to the Finance Committee. The plan focuses on restoring price stability, managing the current account deficit, ensuring that foreign exchange reserves cover three months of import needs, and achieving greater financial stability and transparency.

    He noted that GDP growth has been constrained to 3.5 per cent over the past decade and emphasised the need to boost exports by 10 to 15 per cent. Ahmad also assured that there are no restrictions on imports, aiming to foster a more balanced economic growth.

  • SBP Governor confirms Pakistan’s strong position to achieve IMF targets 

    SBP Governor confirms Pakistan’s strong position to achieve IMF targets 

    The Governor of the State Bank of Pakistan (SBP), Jameel Ahmad, provided a reassuring update to investors on Friday, affirming that the nation is well-positioned to meet the International Monetary Fund’s (IMF) end-September targets for net international reserves and net domestic assets. 

    Ahmad said that Pakistan is “very comfortably” placed to meet IMF targets. 

    This declaration was made by Governor SBP during a meeting with prominent international investors held on the sidelines of the IMF-World Bank gatherings in Marrakech, Morocco.  

    The meeting was organised by prominent global banks such as Barclays, JP Morgan, Standard Bank, and Jefferies. 

    According to an official press release from the central bank, investors were apprised of recent macroeconomic developments, the government’s response to prevailing challenges, and the economic outlook of Pakistan and were provided with the opportunity to seek clarification on these matters. 

    Governor Ahmad informed investors that the current policy framework is strategically oriented towards achieving stability by addressing prevailing macroeconomic imbalances. 

    He highlighted that the SBP had taken early measures to tighten monetary policy in response to escalating global inflation. 

    Nevertheless, certain domestic obstacles, such as the 2022 floods, had complicated the SBP’s efforts to combat inflation. 

    The governor noted that these stabilisation measures have begun to yield positive outcomes. Inflation, after reaching a peak of 38.0 per cent in May 2023, decreased to 31.4 per cent in September 2023 and is anticipated to continue on a downward trajectory in the coming months. 

    Furthermore, Pakistan’s external account has exhibited substantial improvements, with foreign exchange reserves being steadily replenished. 

    Governor Ahmad expressed confidence that inflation would significantly decrease in the latter half of the fiscal year. 

    He emphasised that the stand-by arrangement with the IMF is anticipated to provide essential support for ongoing economic stabilisation efforts. 

    In addition, he reported that foreign exchange reserves have improved considerably, marked by an increase from a low of $3.1 billion in January 2023 to $7.6 billion at the end of September 2023. 

    This reserve enhancement was largely bolstered by non-debt-creating inflows amid favourable market conditions. 

    According to Geo, the Governor further revealed that the SBP has successfully met the forward book target of $4.2 billion for end-September 2023, as agreed with the IMF, with a substantial surplus. 

    Likewise, the SBP is confidently poised to fulfil other end-September IMF targets, including net international reserves (NIR) and net domestic assets (NDA). 

    Concluding his statement to investors, Governor Ahmad conveyed that Pakistan is diligently addressing long-standing structural deficiencies.  

    He expressed optimism that, with the support of both multilateral and bilateral partners, the nation is on course to achieve sustainable and inclusive economic growth in the medium term. 

  • SBP unveils Rs75 commemorative banknote

    SBP unveils Rs75 commemorative banknote

    To commemorate 75 years of Pakistan’s independence, the State Bank of Pakistan (SBP) presented the Rs75 commemorative banknote on Sunday during a ceremony conducted at the SBP Museum.

    The banknote was unveiled by the acting Governor of SBP Dr Murtaza Syed.

    Dr Murtaza made the following observation after the introduction of the commemorative banknote and flag-hoisting ceremony: “While the issuance of coins and postal stamps is a regular and recurring element to honour days of national importance.”

    The former SBP governor Dr. Raza Baqir has signed the banknote, which would be available to the general public from September 30.

    The colour of the banknote is primarily green, with hints of white and yellow. Green is a symbol of prosperity and development that also draws on Pakistan’s Islamic heritage. White, on the other hand, highlights the diversity of religions among its residents.

    The front of the note has portraits of the Quaid-e-Azam Muhammad Ali Jinnah, Sir Syed Ahmed Khan, Allama Muhammad Iqbal, and Mohtarma Fatima Jinnah.

    The images of the Markhor and Deodar trees on the reverse reflect Pakistan’s dedication as a nation to combating climate change and its effects.

    The Markhor and Deodar trees are both representations of the destruction caused by these changes and need immediate action to stop and reverse environmental degradation.

    Speaking at the event, Dr Syed remarked, “The SBP Finance Department went above and above to quickly complete this vital project, and I applaud their efforts.”

    The central bank has now released two notes of this type, including the Rs75 note. In the past, to commemorate Pakistan’s Golden Jubilee, the SBP released the first and, to date, only commemorative banknote in 1997.

    To commemorate the nation’s centennial of independence, children with disabilities also participated and sang national patriotic songs during the ceremony.