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Pakistan to receive $1.17b from IMF within six days after board’s approval: SBP chief

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  • IMF’s executive board is scheduled to meet on August 29.
  • Fund will take up matter of loan dispersal to Pakistan.
  • “Pakistan has commitments of $38bn, we are over financed,” says acting SBP governor.

KARACHI: Pakistan is likely to receive a $1.17 billion loan tranche from the International Monetary Fund (IMF) within six days after the Executive Board’s approval, State Bank of Pakistan Acting Governor Murtaza Syed told Bloomberg TV.

The executive board of the Washington-based lender is scheduled to meet on August 29 (Monday); accordingly, analysts expect the Fund to give its final approval as Pakistan has met all prior conditions necessary to revive the stalled loan programme.

The acting governor said that the country’s forex reserves will shore up to $16 billion by the end of the current fiscal year 2022-23 which dropped to $8 billion due to delay in the revival of the IMF agreement and external flows.

“Pakistan has commitments of $38 billion so we are over financed,” he said, adding that approvals of bilateral help will materialise soon, amounting to $4 billion, while the current account deficit is expected to clock in at around 3% of the gross domestic product.

Pakistan has approached China, Saudi Arabia, Qatar and UAE to meet the financing gap on the IMF’s demand.

The breakdown of commitment of $4 billion from friendly countries includes $2 billion from Qatar, $1 billion from Saudi Arabia (deferred oil facility), and $1 billion from UAE (investment). These amounts are expected to be received over the next twelve months.

Islamabad reached the staff-level agreement with the Washington-based lender in July but the board meeting could not be held despite Pakistan’s appeal to expedite the process.

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E&P Companies Will Invest $5 Billion in Pakistan’s Petroleum Industry

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Over the next three years, local and foreign companies involved in Pakistan’s oil and gas exploration and production sector have shown a strong desire to invest more than $5 billion in the nation’s energy sector.

Recent changes to the Petroleum Policy and the implementation of an exclusive tight gas policy, which provide better incentives and a more investor-friendly regulatory framework, are credited with the increase in investor confidence.

These strategic changes are expected to boost domestic energy production, open up new avenues for growth, and draw large amounts of both domestic and foreign investment.

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With inflation slowing, the SBP is anticipated to lower the policy rate for the eighth time in a row.

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Businesspeople anticipate another reduction in the policy rate when the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) releases the updated rate.

The interest rate for the upcoming two months will be announced by the central bank. It is still unclear if the rate will stay the same or be lowered to reflect stakeholder expectations.

According to experts, the policy rate will be lowered in order to further boost the nation’s economic sector.

Interest rates may be lowered for the seventh time in a row if the inflation rate declines significantly more than anticipated.

In its last six sessions, the MPC had cut the policy rate by 10 percent. In January 2025, it decreased the rate by one percent to 12pc.

12PC POLICY RATE

In January, the State Bank of Pakistan (SBP) announced cut in key policy rate by 100 basis points (bps) to 12 percent from 13pc in line with expectations of the business community.

The policy rate, which had been at 22 percent since June 2024, was slashed by 1,000 basis points to 12 percent.

The SBP governor said the decision was taken with careful consideration. “Although inflation is expected to decline next month (February), core inflation remains a pressing concern,” he stated.

Ahmed highlighted strong remittance inflows and robust export growth as key factors supporting the current account.

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Bulls in the stock market are still going strong.

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As the bullish trend persisted on the Pakistan Stock Exchange (PSX) on Monday, the KSE-100 index soared beyond the 115,000 level.

The PSX continued its upward trend from the weekend, and the KSE-100 index gained 600 points, reaching 115,048 points in early trading.

The index closed at 114,398 points on Friday, up 685 points.

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