Islamabad: Pakistan’s FX reserves increased Tuesday when a Chinese bank rolled over a $600 million loan.
At the Prime Minister’s Youth Sxqports Initiative launch in Islamabad, the premier pledged to increase youth development funding if reelected.
“Yesterday, Exim Bank of China rolled over $600 million to Pakistan. Which increased our foreign currency reserves,” PM Shehbaz Sharif said, adding that friendly countries are strengthening economic indicators.
He didn’t provide the payment deadline.
Moreover, After the International Monetary Fund (IMF) agreed a $3 billion bailout. Program sent $1.2 billion under a nine-month stand-by arrangement, the economy stabilising.
Pakistan received $1 billion from the UAE and $2 billion from Saudi Arabia earlier this month after the IMF-Islamabad agreement reassured them.
The State Bank of Pakistan said last Thursday that Pakistan’s central bank’s foreign exchange reserves rose $61 million to $4.524 billion in the week ending July 7.
IMF estimates
The IMF said the bailout would focus on a tight monetary policy to reduce price pressures in the 220 million-person South Asian nation.
In fiscal year 2024, the IMF predicts inflation to average 25.9% before moderating to 16%.
The government expects 21% inflation in fiscal 2024 with the key policy rate at 22%.
“A continued tight, proactive and data-driven monetary policy warranted going forward,” the IMF statement added.
Pakistan’s balance of payments problem has left central bank reserves covering only a month of restricted imports. In fiscal 2024, the IMF predicts a 1.4-month import cover.
After eight months of severe fiscal discipline negotiations, the IMF accord saved Pakistan from default.
“A market-determined exchange rate is also critical to absorbing external shocks, reducing external imbalances, and restoring growth, competitiveness, and buffers,” the IMF added.
