Pakistan plans to raise up to $4 billion from Middle Eastern commercial banks by the next fiscal year, the country’s central bank governor, Jameel Ahmad, said on Tuesday. This move is part of Pakistan's strategy to address its external financing gaps.
In his first interview since taking office in 2022, Ahmad, the Governor of the State Bank of Pakistan, revealed that the country is in the "advanced stages" of securing an additional $2 billion in external financing. This funding is necessary for the approval of a $7 billion bailout program from the International Monetary Fund (IMF).
In July, Pakistan and the IMF reached an agreement on the loan program, pending approval from the IMF’s executive board and the "timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners."
When asked about monetary policy, Ahmad noted that recent interest rate cuts in Pakistan have achieved their intended goals, with inflation continuing to decline and the current account remaining stable despite the cuts. Pakistan's annual consumer price index inflation was 11.1 percent in July, down from highs of over 30 percent in 2023.
"The Monetary Policy Committee will review all these developments," Ahmad said, emphasizing that future rate decisions could not be predetermined.
The central bank has cut interest rates for two consecutive meetings, reducing them from a historic high of 22 percent to 19.5 percent. The committee will meet again to review monetary policy on September 12.
"Now we have to focus on growth and other related areas because those are equally important for job creation and other socioeconomic issues," Ahmad stated. He added that while the central bank's primary mandate is to ensure price and financial stability, it will also begin to focus on growth.
