Governor Jameel Ahmed expressed before the Senate Standing Committee on Finance that inflation is anticipated to increase in the last quarter of the current fiscal year and the initial quarter of the subsequent year. He emphasized that Pakistan is required to fulfill $4.5 billion in external debt obligations by July 2025.

Ahmed affirmed that a UAE safe deposit will be settled as planned this month. He stated that, for the first time in two decades, the current account exhibited a surplus as of November in the current fiscal year.

The decrease in the interest rate has diminished debt servicing expenses from PKR 9.8 trillion to PKR 8.3 trillion. During the conference, it was disclosed that Pakistani banks incur approximately $800 million each year for ATM card and internet transaction services. The committee proposed the implementation of a local payment card to alleviate this load.

The committee chairman said that if banks do not cease dollar payments for local services, legislative action will be contemplated. He voiced apprehension regarding money shortages amidst the expenditure of billions on card services.

Although the PayPak card was introduced in 2016, the initiative did not achieve significant popularity. Ahmed asserted that remittances may attain $35 billion this fiscal year, exceeding the budgetary objective by $5 billion. He observed that the central bank presently possesses $11.7 billion in reserves and engages in market intervention by purchasing excess dollars or selling when required.

The State Bank anticipates a profit of PKR 3.4 trillion for this fiscal year, with fiscal capacity in debt servicing potentially reaching PKR 1.5 trillion, hence facilitating the attainment of budgetary objectives.

On December 17, 2024, the SBP governor revealed that Pakistan repaid a debt of two billion dollars during the preceding two years.

During a television chat show, the SBP governor indicated that foreign exchange reserves have risen.

He indicated that the current account will exhibit a surplus of 700 million dollars in November.

The governor of the central bank stated that the State Bank of Pakistan has acquired dollars from the interbank market.

He also stated that remittances from abroad will exceed 35 billion US dollars in the current financial year.

The governor’s comments followed the State Bank of Pakistan’s (SBP) reduction of the policy rate by 200 basis points in its monetary policy on Monday.

The State Bank of Pakistan (SBP) announced that the Monetary Policy Committee (MPC) has resolved to reduce the policy rate by 200 basis points to 13 percent, effective December 17, 2024.

It stated that inflation decreased to 4.9 percent year-over-year in November 2024, consistent with the MPC’s projections.

The business community plays a crucial role in propelling the economy, especially in the commercial, trade, and industrial sectors, according to Abdul Rehman Siddiqui, acting president of the Islamabad Chamber of Commerce and Industry (ICCI), on Monday.

He noted that a number of obstacles were impeding its development and stated that the business community was still dedicated to working hard for its financial security with the goal of lowering the nation’s dependency on foreign debt through tax contributions.

According to a news release he published today, the community in turn only anticipates assistance and a favorable atmosphere for doing business.

According to him, there are still issues with accessing basic utilities like gas, electricity, and dependable infrastructure.

In order to support the development of new industries, offer employment opportunities, and increase government revenue—all of which would lessen the need for foreign loans—he emphasized the importance of political stability and long-term economic strategies.

Acting ICCI Vice President Nasir Mehmood Chaudhry stressed the importance of tax breaks and low-interest financing for new enterprises to thrive. In order to achieve economic progress and prosperity, the government has the full support of the acting president and the acting senior vice president of ICCI.

Bulls continued to dominate the market as the Pakistan Stock Exchange (PSX) reached yet another milestone of 118,000 on Monday.

The KSE-100 index surged more than 1,000 points to hit a new high of 118,735 points on the opening day of trading of the business week.

The KSE-100 index finished at 117,586 points on Friday.

The US dollar

However, during the early morning interbank trading, the dollar lost value. In the interbank market, the value of the Pakistani rupee dropped 11 paisas to Rs278.45 against the US dollar.

The dollar closed at Rs278.56 last week.