The International Monetary Fund’s (IMF) staff-level agreement with Pakistani authorities will resolve the country’s inflationary and external debt challenges, said State Bank of Pakistan (SBP) Governor Jameel Ahmad on Tuesday.
The comments follow the IMF’s announcement on Friday that its staff and Pakistani authorities had achieved an agreement on measures that would be supported by a $3 billion, nine-month Stand-By Arrangement (SBA).
The staff-level agreement is subject to IMF Executive Board approval, which is expected by mid-July.
“As a result of this programme, we will see market stability, which will benefit our foreign exchange reserves,” Ahmad said in an interview with state-owned station PTV News.
“The IMF deal would help to resolve these two issues.”
In response to default rumours, the SBP chief stated that the rumours were terrible.
“We were in charge of the situation. There were no circumstances that would force us to default.
“Pakistan paid all of its external debt obligations on time.”
“Despite these payments, our foreign exchange reserves stayed at $4 billion.”
The official noted that the SBP has a clear policy on the exchange rate, under which market forces decide the rate of the currency.
“We anticipate that flows will improve, which will have a positive impact.” Meanwhile, the SBP will keep a close eye on the situation,” he added.
The Pakistani rupee has appreciated against the US dollar in the interbank market, according to Ahmad, and confidence has improved as remittances and export proceeds have increased.
“We’re hoping this continues.”
According to the SBP’s chief, the central bank’s foreign exchange reserves have climbed by more than $500 million.
“We anticipate an increase in foreign currency inflows in the coming weeks.” This would improve our debt-payment capabilities, which would benefit the market as well.
