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Pakistan sees $3.8bn inflows in four months of FY24 amid forex crunch

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12 months ago

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  • IMF inclined for a downward revision of forex reserves projection.
  • EAD in its figures does not include inflows from IMF.
  • EU and EIU yet to disburse any loan amount in current fiscal year.

ISLAMABAD: Amid dwindling official foreign exchange reserves despite signing a $3 billion IMF programme, Islamabad has secured $3.8 billion from multilateral and bilateral creditors in the first four months (July-October) period of the current fiscal year 2023-24, The News reported Tuesday.

The official figures of the Economic Affairs Division (EAD) did not incorporate the $1.2 billion disbursed by the IMF after approval of the $3 billion Standby Arrangement (SBA) program. So, the total dollar inflows in the shape of loans totalled $5 billion.

Now the IMF also seems inclined to downward revise the projection on account of gross foreign exchange reserves as it might witness a reduction from $12.9 billion to around $11.6 to $11.9 billion by the end of the ongoing financial year. 

The government has projected total foreign loans of $17.619 billion for the current fiscal year. 

In the official projection, the government had included $2.4 billion from the IMF for the current fiscal year. Although, Pakistan had signed a $3 billion SBA programme out of which $1.2 billion was so far disbursed by the Fund in August 2023. Now another IMF tranche of $700 million was expected to be disbursed after securing approval of the Fund’s executive board. 

In this scenario, all projections on account of Gross Official Reserves, Net International Reserves (NIR), Current Account Deficit and dollar inflows in the shape of foreign loans were changed for the current fiscal year.

According to the disbursement of foreign loans received by Pakistan showed that Pakistan received $318.1 million during October 2023. 

Islamabad had secured $3.52 billion in the first three months (July-September) period of the current fiscal year. Pakistan had obtained a guaranteed loan of $508.34 million. 

The disbursement of loans from the Asian Development Bank (ADB) stood at $87.5 million in the first four months of the current fiscal year. From AIIB, the total disbursed loan amount stood at $27.86 million. The European Union (EU) and EIU have not disbursed any loan amount so far in the current fiscal year. 

The World Bank’s IDA loan disbursement stood at $303.43 million and the IBRD loan of $67.28 million. The IFAD has disbursed $11.43 million, IsDB $100 million and OPEC Fund $0.01 million in the first four months of the current fiscal year.

The multilateral creditors in totality disbursed $597.49 million during the first four months of the current fiscal year. All bilateral creditors disbursed $435 million in the first four months out of which the Kingdom of Saudi Arabia disbursed $400 million for the oil facility during the July-Oct period of the current fiscal year.

The government also received $2 billion in the shape of time deposits from KSA in the current fiscal year. The government has not generated any international bonds so far in the current fiscal year. 

Minister for Finance Dr Shamshad Akhtar had already announced the shelving of the plan to raise $1.5 billion in international bonds. Pakistan received $306.26 million in the shape of Naya Pakistan Certificates in the first four months. 

The foreign exchange reserves held by the SBP had declined from $8.1 billion on July 23, 2023 to $7.3 billion on November 10, 2023 mainly because of repayments on external debt fronts during this period.

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Dar chairs the CCOP meeting; Blue World’s bid offer of Rs.10 billion is rejected.

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2 days ago

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The Foreign Minister/Deputy Prime Minister chaired the Cabinet Committee on Privatization meeting.

Other committee members who attended the conference included the Federal Secretaries of several Divisions, the Ministers of Finance and Revenue, Industry and Food, Commerce, Power, and Privatization.

The CCOP took the PC Board’s recommendation into consideration and suggested that Blue World’s bid of 10 billion rupees for the sale of 60% of PIACL’s shares be rejected. The bid was rejected by the CCOP, who chose to follow the PC Board’s advice.

The government’s determination to sell out PIACL through government-to-government or privatization was reaffirmed by the CCOP.

The CCOP was pleased with the Aviation Division’s evaluation of PIACL’s sound financial standing.

Additionally, the CCOP established a committee, chaired by the Minister of State for Finance, to assess potential transaction possibilities for the privatization of the Roosevelt Hotel and the appropriate modes of adoption in light of existing legal rules.

Prior to its subsequent meeting, the CCOP also ordered that all difficulties be resolved and an agreement for the selling of services to an international hotel be concluded.

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The KSE-100 Index has surged by 790 points, resulting in an all-time peak for the stock exchange.

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2 days ago

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The benchmark KSE-100 Index increased by 790 points, marking a new all-time high for the Pakistan Stock Exchange (PSX) at 94,982 points.

The record-breaking performance underscores a surge of optimism and investor confidence in the stock market.

As investors responded to favorable economic signals, the market experienced a significant increase of over 500 points in early trading. Later, the KSE-100 Index reached another record level of 94,786 points after adding 594 points to its upward trajectory.

This positive development comes as the State Bank of Pakistan’s (SBP) foreign exchange reserves saw an increase of $84 million, reaching $11.26 billion during the week ending November 8, according to data released by the central bank on Thursday.

This represents an increase of 0.75% from the previous week. In addition, the nation’s total liquid foreign reserves experienced a modest increase, increasing by $33.7 million or 0.21% week-on-week to $15.97 billion.

In contrast, commercial banks’ reserves experienced a decline of $50.3 million or 1.06%, ultimately settling at $4.71 billion.

Furthermore, the economic team of Pakistan has expressed confidence in the discussions with the International Monetary Fund (IMF). Minister of State for Finance Ali Pervaiz Malik, in an exclusive conversation with Samaa TV, claimed talks were moving in a positive direction.

Highlighting improvements in Pakistan’s economic conditions, Malik noted substantial progress over the past six months to a year. He emphasized that Pakistan’s current economic situation has seen significant enhancement, with a reduced current account deficit of only $100 million in the first quarter, a reflection of the government’s strategy to increase remittances and boost exports.

Malik shared that discussions with the IMF are primarily focused on external financing, and while there have been speculations about a potential mini-budget or an increase in the petroleum levy, he clarified that these are currently premature considerations.

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Positive IMF negotiations propel KSE-100 Index above 94,000 points

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3 days ago

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As a result of investors’ optimism about the reported progress in the continuing talks with the International Monetary Fund (IMF), the Pakistan Stock Exchange (PSX) experienced a robust surge.

The benchmark KSE-100 Index of the PSX, which tracks market sentiment, rose 713 points to a new record high of 94,068 points, breaking above the 94,000-point barrier, as the trading session began.

Early in the day, the stock market began its upward trajectory as the KSE-100 Index steadily rose, gaining 574 points to reach 93,932 points. A possible agreement with the International Monetary Fund (IMF) might lead to more fiscal stability and back Pakistan’s economic reforms, which is why investors are so optimistic about the country’s future.

Officials from the Federal Board of Revenue (FBR) informed the International Monetary Fund (IMF) on Wednesday that the government would not be introducing a mini-budget and would instead continue to aim to collect Rs12,970 billion in taxes each year.

In line with continuing discussions with the Fund, FBR sources revealed that petroleum goods will not be subject to the General Sales Tax (GST).

The fact that Pakistan’s tax-to-GDP ratio has increased from 8.8% to 10.3%, a 1.5% gain viewed as a favorable sign of Pakistan’s fiscal policies, has reportedly pleased the IMF, who has voiced satisfaction at Pakistan’s recent economic performance.

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