SBP Governor Jameel Ahmad announced on Thursday that Pakistan’s totalexternal financing requirement for the fiscal year FY24 amounts to $24.6billion, encompassing interest payments of $3.4 billion and principalrepayments of $21 billion. Nonetheless, Governor Ahmad noted that asubstantial portion of this sum, specifically $2.8 billion ($2.2 billion inprincipal and $0.6 billion in interest), has already been settled.
Additionally, the central bank has secured commitments for rolloverstotaling $8 billion, with an expectation of an additional $3 billion to berolled over. Consequently, the net payable amount for the remainder of FY24stands at $8 billion.
Governor Ahmad outlined the target for the current account deficit (CAD) inFY24, aiming for a range of 0.5% to 1.5% of the Gross Domestic Product(GDP). Furthermore, he highlighted that the CAD for August is projected tobe $160 million, a significant improvement over previous estimates.
It’s worth noting that all quantitative targets set by the InternationalMonetary Fund (IMF), including those related to Net Domestic Assets (NDA),swaps, and net international reserves, have been achieved. The success inmeeting these targets now places the government’s focus on fulfilling theremaining performance criteria, such as managing the primary budgetdeficit, government guarantees, and targeted cash transfers.
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The SBP attributed the recent T-bill auction, in which cutoff ratesexceeded the policy rate, to a backdrop characterized by economicuncertainty, the depreciation of the Pakistani rupee, and marketexpectations of a potential policy rate hike. Contrary to marketexpectations, the central bank decided to maintain the policy rate at 22percent, highlighting the need for stability and cautious monetary policyin the current economic climate
