Pakistan’s Financial Future: Securing $4 Billion in External Funding

What will be Pakistan’s Financial Future? Answer is lets hope in right direction as Pakistan is looking to borrow up to $4 billion from commercial banks in the Middle East by next year. This move aims to fill the gaps in the country’s external financing. The Governor of the State Bank of Pakistan, Jameel Ahmad, shared this information in an interview with Reuters. Pakistan is also close to securing an additional $2 billion in external financing, which is required for the International Monetary Fund (IMF) to approve a $7 billion bailout program. The IMF and Pakistan agreed on the loan program in July, but it’s still subject to approval from the IMF’s executive board.

Recently, Pakistan’s central bank cut interest rates, which has helped slow down inflation. The annual consumer price index inflation was 11.1% in July, down from over 30% in 2023. The central bank will review monetary policy again on September 12 and decide on future rate changes. Now that inflation is under control, the central bank is shifting its focus to growth and job creation. Pakistan’s central bank aims to ensure price and financial stability while promoting growth.

Pakistan has planned to borrow around $20 billion from foreign sources this year, including $4 billion from foreign commercial borrowing and $1 billion from international bonds. This borrowing will help Pakistan’s Financial Future to increase Pakistan’s reserves to around $19-20 billion by the end of the year. With this much borrowing, Pakistan’s reserves are estimated to grow significantly, providing a much-needed boost to the country’s economy.