Dollar reserves improved, $22 billion purchased; State Bank hints at maintaining interest rates

Karachi: Significant progress has been made in Pakistan’s foreign exchange reserves and monetary policy. Governor State Bank Jamil Ahmed has said that the central bank has stabilized reserves by purchasing $22 billion from the open market during the last two years, which helped reduce external payment pressure.
Talking to the media, he said that the country’s external accounts are now in better condition than before and the availability of dollars has improved significantly. He said that the central bank has provided stability to the market by adopting financial discipline and a cautious strategy.
He clarified that keeping in mind the current economic conditions, the interest rate will be maintained at 10.5 percent for the next two months so that business and investment activities continue.
According to the Governor of the State Bank, the inflation rate has come down to 7.4 percent, which is a big decrease compared to the high level of last year. He said that the reduction in inflation will provide relief to the people and will help in keeping the policy rate stable.
However, he warned that the increase in imports and decrease in exports is a worrying trend. Especially the increase in consumption of petrol and diesel has increased the import bill, which may affect the trade deficit.
Regarding the repayment of loans, he said that $ 11 billion is to be paid during the current fiscal year, of which almost half has already been paid. According to him, the government and the State Bank are trying to limit the external debt and maintain it around the level of $ 101 billion.
Economists say that keeping interest rates stable and increasing reserves will strengthen investor confidence. If this trend continues, both the rupee and the economy can benefit.