SBP has announced that it has enhanced the monitoring of foreign exchange operations of domestic currency exchange companies

According to senior officials of the State Bank of Pakistan (SBP), Pakistan’s economic situation has improved in recent months and the country is not at the risk of default. The central bank’s officials are confident that with the International Monetary Fund (IMF) program secured, meeting the external financing requirements would not be a problem.

 

The Release $1.17B Tranche Will Save Pakistan from Default Risk 

 

Moreover, the IMF has guaranteed Pakistani authorities of immediate approval of the $1.17 billion tranche from the Executive Board after August 15. The central bank of Pakistan predicts inflation for the current fiscal year to range between 18 and 20 percent. The central bank considers that Pakistan’s external debt is bearable, and there would be no emergency in the financial sector of Pakistan, hence avoiding the risk of default factor.

 

The officials of the State Bank of Pakistan also stated that despite the political uncertainty, the IMF is mindful that all the political parties in Pakistan are in support of the Fund’s program. Friendly countries have ensured Pakistan of their support after the approval of the IMF program, and the country will receive sizeable funds from the friendly countries to improve the financial condition of Pakistan and help it overcome the possible risk of default.

 

Pakistan’s Situation Cannot Be Compared with Sri Lanka’s 

 

For the past two years, the GDP growth of Pakistan has varied between 5 percent and 6 percent. However, the growth was not sustainable due to an upsurge in imports and a rising deficit. The central bank expects GDP growth for the current financial year to be around 3 to 4 percent. According to the central bank officials, Sri Lanka’s deficit is three to four times compared to Pakistan. Furthermore, Sri Lanka took more than two years to fix the policy rate and exchange rate, continuing that Pakistan’s circumstances should not be compared with Sri Lanka.

 

 Read more: SBP Attributes Rupee Depreciation Against US Dollar Part of Global Phenomenon

 

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