Finance Minister sees Pakistan’s forex reserves around $9-10bn by June 2024

Federal Minister for Finance and Revenue Muhammad Aurangzeb said on Tuesday that foreign exchange reserves held by the State Bank of Pakistan (SBP) would reach around $9-10 billion by the end of this fiscal year. 

According to the media reports, he made these remarks while addressing the inaugural session of the 7th “Leaders in Islamabad Business Summit” in Islamabad.  

The finance minister expressed his anticipation that the forex position in June 2024 would be much better than where the reserves were in the previous year.

Pakistan’s foreign exchange reserves crossed the $8 billion mark again last month after they fell below the said level in late February.

Regarding the Stand-By Agreement (SBA), Aurangzeb deemed it important to have entered the programme. 

The minister asserted that the country’s economic situation has improved compared to the previous year. He mentioned that when the new government assumed office, the foreign exchange reserves stood at $3.4 billion, covering only 15 days of imports. However, significant progress had been made, with reserves now exceeding $13.3 billion.

He anticipated further improvement in reserves position following the disbursement of $1.1 billion tranche from the International Monetary Fund (IMF). 

The minister noted the positive performance of the Pakistan Stock Exchange (PSX) in recent days, attributing it to the sentiments that were restoring market confidence. 

Regarding economic indicators, he highlighted a 74% decrease in the current account deficit, which reached $1 billion as compared to $3.9 billion previously. 

He also mentioned a 24.9% decrease in the trade deficit over the last nine months of the current financial year, which reduced from $22.7 billion to $17.0 billion. 

The minister outlined the government’s focus on three key areas for transformation: tax, energy sectors, and reforms in the State Owned Enterprises (SOEs). 

He expressed his intention to enhance the tax-to-GDP ratio, which currently stood at 9%, through tax enforcement measures and expanding the tax base. 

Muhammad Aurangzeb affirmed the support of friendly countries both domestically and internationally for Pakistan’s economic growth. 

He said that the government was implementing the decisions of the Federal Shariat Court to promote an interest-free economy and establish Islamic banking branches across the country.