The State Bank of Pakistan (SBP) governor Jameel Ahmed said on Tuesday that Pakistan’s external debt obligations for the current fiscal year (FY24) amount to $24.6 billion, of which $5.4 billion have already been repaid.
Speaking after the Monetary Policy Committee (MPC) meeting, Ahmed said that the remaining debt stands at $19.2 billion, out of which $12.4 billion are expected to be rolled over by the creditors, leaving a net repayment of $6.8 billion for the rest of the fiscal year.
He said that the $6.8 billion repayment includes $4.3 billion of principal and $2.5 billion of interest. He added that the existing foreign exchange reserves of the country are sufficient to meet the debt servicing obligations, as they stand at around $7 billion.
Ahmed also said that the country is on track to meet the Net Domestic Assets (NDA) and Net Foreign Assets (NFA) targets for December 2023, as agreed with the International Monetary Fund (IMF).
He said that the NFA of the SBP and the overall banking system have improved since June 2023, due to considerable foreign exchange inflows in July 2023 from various sources, such as remittances, exports, loans, and grants.
He said that the improvement in NFA, along with the contraction in NDA, has resulted in a better compositional mix of broad money and reserve money, which are the main indicators of monetary expansion and inflation.
He said that the broad money (M2) growth decelerated to 13.7% year-on-year (YoY) as of November 24, 2023, from 14.2% YoY as of end-June 2023. He attributed this to the net retirements in private sector credit and the more than seasonal decline in commodity operations financing.
He said that the SBP has kept the policy rate unchanged at 22% for the next two months, as it balances the need to support the economic recovery.
He said that the SBP expects the IMF to release the next tranche of $700 million in January 2024, after the completion of the second review of the Standby Agreement (SBA).Â
The SBP governor said that the IMF has projected Pakistan’s foreign exchange reserves to reach $9 billion by June 2024, which would enhance the country’s external stability and confidence.
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