Pakistan will soon finalize and sign a staff-level agreement (SLA) with the International Monetary Fund (IMF) for the release of roughly $1.1 billion through the lender’s Extended Fund Facility (EFF) program.
A meeting of the Senate Standing Committee on Finance and Revenue was held today with Senator Saleem Mandviwalla in the chair. State Bank of Pakistan (SBP) Governor Jameel Ahmad informed the committee that Pakistan is now very close to a bailout from the IMF.
The governor briefed the committee that foreign exchange reserves held with the central bank had reached $4.3 billion and will increase even further by June 30th, 2023.
In addition, he stated that the current account deficit (CAD) will remain below $7 billion for the current fiscal year, compared to the massive $17 billion in FY22. He added that the initial fiscal year target was $10 billion, but CAD was $3.8 billion in the first seven months. The governor said this containment was made possible by policy and management measures implemented during the period.
In terms of fiscal growth projected till June, the SBP Governor said the estimated economic growth rate for FY23 is 5 percent, but the country has faced numerous challenges due to external and internal issues.
The committee members highlighted that due to the non-opening of letters of credit (LCs), important imports were being held up. One member said that artificially controlling CAD is not an achievement. Another member said the interest rate and inflation in the country are at the highest level in history.
The committee members further directed measures to stop the smuggling of dollars to Afghanistan.