Federal Finance Minister Muhammad Aurangzeb said on Sunday that the State Bank of Pakistan (SBP) is working on both the exchange rate and the interest rate, and that the situation is expected to improve further as stability strengthens.
He made these remarks while inaugurating the Job and Education Expo at the Expo Centre, Karachi, organised by the Pakistan Hindu Council. Around 120 stalls were set up by different institutions and companies to facilitate students seeking career opportunities.
Speaking to the media, Aurangzeb expressed gratitude to the organisers, noting that he had the opportunity to meet “the country’s future leadership” at the event. He pointed out that while both public and private institutions were present at the fair, “the absence of the corporate sector was felt.”
The minister stressed that “technology is the path to the future,” urging the youth to work with both “their hearts and minds” and to “always strive for excellence.”
On Independence Day celebrations, which he described as the “Marka-e-Haq,” Aurangzeb said followers of all religions commemorated the occasion with great spirit.
Aurangzeb said the corporate sector needs to step forward, adding that “interest rate should not be made the single-point agenda.” To promote working capital, he said Pakistan must look beyond banks and also include capital markets. He emphasised that the debt capital market should be shifted to the Pakistan Stock Exchange mechanism for greater efficiency.
Highlighting reforms in the energy sector, the minister said circular debt in the power sector is on the decline, with three distribution companies (DISCOs) to be privatised soon. He added that the government is also working to resolve circular debt in the gas sector, which has long weighed on the economy.
On monetary policy, Aurangzeb clarified that “the government has no role in setting interest rates, as this falls under the mandate of the State Bank of Pakistan.” He further stated that “the exchange rate would continue to be determined by the market.” Pakistan, he said, already has funding available, and “the challenge now is to put those resources to effective use.”
The minister praised Mustafa Kamal’s efforts in population control and underscored the importance of women’s economic participation, calling it a key driver in reducing poverty. He confirmed that discussions with the World Bank regarding funding to support such initiatives had already taken place.
Aurangzeb also said that the International Monetary Fund’s (IMF) review mission would soon arrive under the ongoing 37-month programme, stressing that the government remained in constant contact with the Fund. Looking ahead, he expressed optimism that “by 2047 Pakistan’s economic situation would be that of a developed nation.”
Pointing to Pakistan’s strong anti–money laundering framework, Aurangzeb said it had enabled the country’s removal from the Financial Action Task Force (FATF) grey list. He expressed confidence that Pakistan would remain off the list going forward.
On the damage caused by recent rainfall in Khyber Pakhtunkhwa, the finance minister said his immediate priority was the rehabilitation of affected people, though it was still too early to estimate the scale of losses.
When asked about traders’ demands for a new province, Aurangzeb declined to give a direct response.
“There is no button for growth; the real thinking should be about sustainable growth,” he said, stressing that the government’s role is to provide an enabling environment. He highlighted the success of public-private partnerships and noted, “We are moving toward the AI world, and there is no room for doubt that we must move forward.”
Concluding his remarks, Aurangzeb said that while “ups and downs keep coming, talent remains unaffected.” He declared that “economic stability has now been achieved in the country” and noted that “the three major rating agencies are positive about Pakistan.”
Pakistan recorded economic growth of 2.7 percent in FY25 compared to 2.5 percent in FY24 and a contraction of 0.21 percent in FY23. For the current fiscal year 2025–26, the government has set a growth target of 4.2 percent.
The finance minister noted that the Pakistan Stock Exchange (PSX) and listed companies were showing improved performance, with firms reporting strong financial results. He said this reflected the positive impact of stabilised economic fundamentals.
Aurangzeb highlighted that the country’s three major global credit rating agencies Fitch, S&P, and Moody’s had upgraded Pakistan’s rating and were aligned in their assessments for the first time in years, which he described as “a vote of confidence.”
He explained that stability had been achieved through joint efforts: the government exercised fiscal responsibility while the State Bank implemented a prudent monetary policy. This included building foreign exchange reserves, maintaining a market-based exchange rate, and cutting the policy interest rate by half to 11 percent over the past year amid easing inflation.
On exports, he emphasised the need to improve competitiveness. He said the government was rationalising tariffs to support growth and cited the World Bank’s view that Pakistan’s tariff reforms could represent its “East Asia moment.”
Aurangzeb added that financial costs and energy costs were both beginning to move in the right direction. He said rationalisation of taxes would depend on fiscal space, but the government’s aim was to broaden the tax net while reducing rates for the manufacturing sector and salaried class to ease their burden.
