Country’s forex reserves to hit $13.6b in next FY

Pakistan also assures IMF they will stand at $9b by end of current fiscal

ISLAMABAD:

Pakistan has assured the International Monetary Fund (IMF) that it would increase its foreign exchange reserves to $13.6 billion in the next fiscal year.

It has also assured the Washington-based lender in the Memorandum of Economic and Financial Table that the country’s foreign exchange reserves would stand at $9 billion by the end of the current financial year.

Sources said in the Memorandum on Economic Future Policy Framework, it has been decided that during the next financial year, Pakistan’s debts amounting to $6.34 billion would be rolled over.

The sources said the IMF and Pakistan had agreed on the latter increasing its foreign investment by $1.31 billion in the next financial year.

The IMF has also been assured that in this fiscal year, Pakistan’s foreign investment would jump up to $700 million.

Finance ministry sources said the civil-military led Special Investment Facilitation Council (SIFC) would play a role in increasing foreign investment in the country during this financial year.

The finance ministry and IMF have exchanged assurances for a new loan programme for the next fiscal year.

During the recent IMF review talks, the lender was briefed on the mandate, role and powers of the civil-military body.

The IMF’s concerns were about the vast powers the SIFC had for granting tax exemptions, awarding direct contracts by bypassing the Public Procurement Regulatory Authority process and offering preferential treatment to investors from certain countries.

The IMF’s major concern was the indemnity to SIFC decisions from accountability, which according to the global lender was tantamount to compromising transparency in public decision making.

The IMF also raised questions over the long-term role of the SIFC and its need when there were other government departments and agencies working for bringing foreign investment.
The lender was told that the SIFC had been established under extraordinary circumstances to bring foreign investment in times of crisis.

The IMF was assured that the SIFC did not have ambitions to take over functions of other government agencies.

In a related development, Pakistan’s total liquid foreign reserves have reached $12.1 billion. The State Bank of Pakistan (SBP) held reserves of $7.2 billion.

In a statement issued on Thursday, the SBP said its reserves decreased by $237 million to $7.25 billion because of debt repayments during the week that ended on December 1.

It added that the net foreign reserves held by commercial banks stood at $5.13 billion
The total liquid foreign reserves held by the country, in the previous week that ended on November 24, stood at $12.39 billion.
(With input from APP)