Pakistan is targeting to secure up to $4 billion from Middle Eastern commercial banks by the next fiscal year, as disclosed by the country's central bank governor to Reuters on Tuesday. This move is aimed at addressing external financing shortfalls.
In his inaugural interview with any media since assuming office in 2022, State Bank of Pakistan Governor Jameel Ahmad revealed that Pakistan is also in the final stages of acquiring an additional $2 billion in external financing needed for the IMF's approval of a $7 billion bailout package. An agreement on this loan program was reached with the IMF in July, pending approval from the IMF's executive board and confirmation of necessary financing assurances from Pakistan's development and bilateral partners.
Regarding monetary policy, Ahmad noted that recent reductions in interest rates in Pakistan have achieved their intended outcomes, with inflation slowing and the current account staying manageable, despite the rate cuts. Pakistan's annual consumer price index inflation stood at 11.1% in July, having declined from peaks of over 30% in 2023.
Ahmad stated that the Monetary Policy Committee will assess these developments, emphasizing that future rate decisions are not predetermined. The central bank has reduced rates consecutively from a historic high of 22% to 19.5%, with the next monetary policy review scheduled for September 12.
Ahmad highlighted that the central bank's priority is to maintain price and financial stability before refocusing on growth and related areas, which are crucial for job creation and socioeconomic issues.
