The State Bank of Pakistan (ESB) has said in its joint statement that additional loans of $4 billion are planned for the next 12 months.
In a joint statement by the Ministry of Finance and the State Bank, the borrowing requirements arose due to current account deficits of about $10 billion and principal repayment of external loans of about $24 billion.
According to the State Bank, the policy rate has been increased by 800 basis points to control this deficit in the future, and the energy subsidy package has been scrapped.
“Foreign exchange reserves started to decrease due to the withdrawal of currency.”
According to the declaration, Pakistan’s problems are of a temporary nature, for which all efforts are being made, and from the month of February, Pakistan’s foreign exchange reserves began to decrease.
The State Bank said that the reason for this is more outflow than inflow. Inflow mainly consists of multilateral loans from the IMF, World Bank, and Asian Development Bank.
According to him, deposits from friendly countries like China, Saudi Arabia, and the United Arab Emirates are also included, as is bilateral financing in the form of loans and commercial loans from foreign banks through Eurobonds and Sukuk.
Most of the fall in revenue is due to the delay in the next IMF review.
According to the State Bank and the Ministry of Finance, most of the decline in revenue was due to the delay in the next IMF review, which led to policy confusion.
He further said that it came out because of hurt sentiments due to dwindling foreign exchange reserves and the uncertainty in the IMF programme and the country’s politics.
According to the statement, a key milestone of staff-level agreement was reached on July 13, when the next IMF review was completed.
“The official board meeting for the release of the next episode is expected in the coming weeks.”
According to the State Bank, a formal board meeting is expected in the coming weeks to issue the next tranche of $1.2 billion. He further said that both fiscal policy and monetary policy have been tightened appropriately to reduce the current account deficit.
According to the State Bank, the IMF is ready to meet all the terms and conditions agreed with the institution for the remaining 12 months of the programme, to meet the net borrowing requirement of Pakistan under the current IMF programme in FY 2023. will be fulfilled.
