MARRAKESH: Governor State Bank of Pakistan (SBP) Jameel Ahmad met key international investors in Marrakesh, Morocco on Friday, including officials of Barclays, JP Morgan, Standard Bank, and Jefferies on the sidelines of the IMF-World Bank meetings.
He discussed domestic challenges like unprecedented floods in the previous fiscal year, which complicated the efforts of SBP to reduce inflation.
SBP policy rate
He said that over the last two years, SBP has increased the policy rate by 1500 bps.
According to a press statement released by the central bank on Friday, “SBP evaluates the actual interest rates going substantially positive on a forward-looking basis. Inflation is anticipated to come down during the remaining months of this fiscal year.”
It said that the IMF’s SBA is predicted to support the current policy efforts to stabilize the economy. The current account deficit (CAD) decreased to 0.7% of GDP in FY23 from 4.7% in FY22. The CAD is anticipated to range from 0.5% to 1.5% of GDP in FY24.
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Furthermore, non-debt-creating inflows largely supported the reserves build-up amid favorable market conditions.
“SBP’s forward foreign exchange liabilities have decreased, and the forward book goal of $4.2 billion for the end of September 2023, agreed upon with the IMF, has already been achieved,” The statement said.
It added that the SBP is well-positioned to meet the other end-September IMF targets, including the Net Domestic Assets (NDA) and Net International Reserves (NIR).
