According to Dr Murtaza Syed, acting governor of the State Bank of Pakistan (SBP), despite the significant strain on foreign exchange reserves, Pakistan would soon make up its $4 billion gap in external financing with the help of friendly countries under IMF guidelines.
He also stated that the next 11 to 12 months will see higher inflation, which is why the central bank has set an average inflation target for the current fiscal year 2022–2023 of 18 to 20 per cent.
The News reports that Pakistan has already met its $34 to $35 billion in gross external finance requirements, according to acting SBP Governor Dr Murtaza Syed.
Islamabad is aiming to confirm $4 billion in incoming funds from Saudi Arabia, the UAE, and Qatar, the three friendly countries to over come the financial imbalance. He claims that these additional dollar inflows will be used to increase foreign exchange reserves and create a safety net in the event of a crisis-like situation.
He refrained from giving an exact timetable but insisted that the $4 billion funding shortfall will be rapidly remedied. He claimed that the government and IMF high-ups were making urgent efforts to obtain confirmation from their respective countries.
He commended Bangladesh and said the country performed well, decided to return to the IMF, and also increased utility bills while keeping enough levels of foreign exchange reserves while denying that the situation was identical to Sri Lanka.
Murtaza Syed asserts that because there isn’t a quick fix to handle rising inflation, people will have to deal with this difficult situation. Even though it is a difficult time, he claimed that if nothing was done, the country would face an even more difficult position.
The SBP has lowered the cash margin requirements for opening L/Cs for imports, and it now rewards people who do so, the official claimed. He said that the IMF intervened to stop the loss of foreign exchange reserves and opposed trade restrictions.
It is currently predicted that the current strain on foreign reserves will cease within the next two months. He advocated energy conservation as a means of lessening the burden of high import expenses.
The senior official said Pakistan will continue to see boom-and-bust cycles as long as the structural problems with the economy persisted. In order to demonstrate how the overheating of the economy resulted in imbalances known as the budget deficit and current account deficit, he used a recent example in which the country’s GDP expanded by 6%. He stated that even though a recession is not imminent, the economy must be carefully handled.