State Bank of Pakistan Acting Governor Dr. Murtaza Syed has assured that Pakistan's $4 billion external financing gap will be closed soo...
State Bank of Pakistan Acting Governor Dr. Murtaza Syed has assured that Pakistan's $4 billion external financing gap will be closed soon and the economy is not at all close to bankruptcy.
In an interview to The News newspaper, Acting Governor State Bank Dr. Murtaza Syed said that Pakistan had managed 34 to 35 billion dollars in external finance while obtaining 4 billion dollars from friendly countries including Saudi Arabia, Qatar and the United Arab Emirates. It was trying.
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He said that the additional inflow of dollars will increase the situation of external reserves, taking them out of the crisis-like situation.
The Acting Governor State Bank did not disclose the availability of funds but said that both the government and the International Monetary Fund (IMF) were trying to ensure funds from friendly countries to bridge the financial gap.
Earlier, sources told Dawn that the IMF had asked Pakistan to assure Saudi Arabia and the UAE that they would release the expected $4 billion fund after the release of the IMF tranche. .
Inflation
Dr. Murtaza Syed, regarding inflation, said that due to global supply disruption, there has been a 'super cycle' effect on commodities in the world and Pakistan has no choice but to increase agricultural production to ensure food security. .
He said that the increase in inflation will continue for the next 11 months or a year and the central bank is targeting the inflation rate between 18 and 20 percent in the current financial year.
He said that there is no magic to overcome inflation and the people will have to face difficulties for a period of time.
He said that we know that this is a difficult phase but there is no other option.
'Not close to bankruptcy'
Dr. Murtaza Syed said that we are not close to bankruptcy but the economy has to be managed carefully.
He said that if the structural problems of an economy are not removed, then Pakistan will go through boom and bust cycle.
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Acting Governor State Bank said that GDP growth during the last financial year was 6 percent, which led to acceleration and imbalance.
He said that the country would have to increase exports and direct investment to avoid the boom and bust cycle, a cycle that cannot be controlled unless the private sector brings in dollars.
He said that while the IMF currently helps bridge the external financing gap, when the IMF program ends, there is no collateral left to keep the country on the path to reform.
He said that the country has had the problem of external and internal economic imbalances because the reform structure was changed in the past.
Dr Murtaza Syed said that Pakistan's external financing gap was 'not that big' but it became a problem because, unlike other countries where private investment helps, in Pakistan it was only the government's responsibility to counter this. Fill in
He said that the country's economy will stabilize slowly.
The Acting State Bank Governor also dismissed the impression that the country is facing a debt crisis and said the overall debt is manageable.
Asked about the onset of the recent crisis, he said the IMF was "angry" by the previous government's decision to subsidize fuel prices.
Read more: State Bank cracks down on exchange companies to stabilize rupee
He said that with this, last year's budget led to expansionary policy and monetary policy was resorted to.
Exchange rate
Acting Governor State Bank also rejected the impression that the IMF has given a specific target for the exchange as well.
He said that State Bank had intervened recently and would do so again in future if any unrelated activity was noticed.
He said the State Bank had recently taken action against the exchange companies in light of the valuations and the surprising rise in the value of the dollar.
He stressed that the value of the rupee will not be manipulated artificially, but no one can be allowed to do whatever they want, so the central bank will take steps to stop the erratic movement of the exchange rate.
Dr. Murtaza Syed said that it is hoped that the pressure on the exchange rate will end in the next two months.
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