Pakistan is aiming to secure up to $4 billion from Middle Eastern commercial banks by the next fiscal year to address its external financing requirements, according to Jameel Ahmad, the Governor of the State Bank of Pakistan. In his first interview since assuming office in 2022, Ahmad told Reuters that the country is also in “advanced stages” of obtaining $2 billion in additional external financing necessary for the approval of a $7 billion bailout program from the International Monetary Fund (IMF).
Pakistan and the IMF reached a staff-level agreement in July on the loan program, contingent on IMF executive board approval and “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.”
Regarding Pakistan’s monetary policy, Ahmad noted that recent interest rate cuts have been effective in controlling inflation and maintaining a stable current account. The country’s annual consumer price index inflation rate fell to 11.1% in July, a significant decrease from its peak of over 30% in 2023.
“The Monetary Policy Committee will review all these developments,” Ahmad stated, emphasizing that future rate decisions will be based on evolving economic conditions and cannot be predetermined. The central bank has reduced interest rates for two consecutive meetings, lowering them from a historic high of 22% to 19.5%. The next monetary policy review meeting is scheduled for September 12.
Ahmad also highlighted the need to balance price and financial stability with economic growth. “Now we have to focus on growth and other related areas because those are also equally important for job creation and other socioeconomic issues,” he said, underscoring the central bank’s commitment to fostering both economic stability and development.
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