Pakistan sees Middle Eastern banks to plug external financing gaps: SBP chief

Pakistan looking towards Middle Eastern commercial banks to secure up to $4 billion by the next fiscal year to plug external financing gaps, said the governor of the State Bank of Pakistan, Jameel Ahmed. 

In an interview with the foreign news agency Reuters, the governor of SBP, Jameel Ahmed, said Pakistan was in the advancing stages of attempts to secure an additional $2 billion for assisting unlock the 37-month-long $7 billion bailout programme of the International Monetary Fund (IMF). 

Pakistan and the global lenders reached an agreement on the loan programme in July, but approval from the Fund’s Executive Board has not yet been received due to the delay in confirmation about external financing from friendly countries. 

However, the current cut down in policy rate has had a positive impact on inflation, as the consumer price index declined over 30 per cent. 

“Now we have to focus on growth and other related areas because those are equally important for job creation and socioeconomic issues,” He said. 

The country was negotiating with Middle Eastern banks to secure a $4 billion loan to meet a condition of the IMF about external financing.

For the ongoing fiscal year, Pakistan need a total of $20 billion in external financing, of which Saudi Arabia rollover $5 billion, China $4 billion and $3 billion rollover by the UAE.

Of the estimated $20, Pakistan targeted to arrange $4 billion through the commercial bank and another $1 billion in international bonds. 

With this borrowing, Pakistan’s reserves were estimated to grow about $19-20 billion by the end of the current fiscal year.