Forex reserves to reach $9-10bn by end of June, says finance minister

Published April 23, 2024
Finance Minister Muhammad Aurangzeb addresses a crowd at Leaders In Islamabad Business Summit on Tuesday. — DawnNews TV
Finance Minister Muhammad Aurangzeb addresses a crowd at Leaders In Islamabad Business Summit on Tuesday. — DawnNews TV

Finance Minister Muhammad Aurangzeb said on Tuesday that Pakistan’s foreign exchange reserves would reach “anywhere between $9 to $10 billion” by the end of June.

Addressing the inaugural session of the seventh ’Leaders In Islamabad Business Summit, he said the expected position in June would be a “much better position in terms of where we were [in the previous year]”.

Pakistan’s forex reserves crossed the $8bn mark again last month after they fell below it in late February.

The minister further said the International Monetary Fund (IMF) should not be seen as “an end, but a means to an end”.

Regarding the current Stand-By Agreement (SBA), Aurangzeb deemed it important to have entered the programme: “That was absolutely critical that we did that as a country for a reason. There is no plan B. Plan B is unimaginable when you are in a situation where I said you are down to 15 days of import cover.”

The finance minister also recalled that the country was praised during his recent visit to Washington for showing the “necessary discipline needed to go through the programme”.

He stated that they initiated discussions with the Fund for a longer and larger programme for two reasons: to “bring permanence in this macroeconomic stability” and execute the economic structural reform agenda.

“I’ve kept saying that the country doesn’t need policy prescriptions; we know the what and why for the longest time, we just don’t do it,” Aurangzeb said, adding that the country needed to get into an “execution mode”.

“We need to move towards sustainability,” he stressed, warning that otherwise, reforms could not be implemented.

Aurangzeb also termed the energy equation a “huge priority” when it came to the sustainability of the reforms, whether they pertained to power or petroleum sectors.

Highlighting the tax challenges, the finance minister said, “One is a policy and enforcement gap and the other is obviously bringing in the undertaxed and the untaxed sectors into the net.”

He also noted that Rs1.7 trillion worth of litigation was pending with tax tribunals. “I repeatedly say we need timely decisions whether it’s a small company or a big country. Timely decisions and timely executions,” the minister underscored.

Aurangzeb stressed that the provinces and the Centre needed to work together to bring the sectors into the tax net.

‘Very clear roadmap needed to get out of IMF loans’

On privatisation, the finance minister reiterated his claim that the government had “no business in being in business”.

He urged all ministries and operating units to “step up” to stop the drag of state-owned enterprises (SOEs) and bring them towards privatisation.

The finmin also addressed the critical question of how to get out of the IMF programme, he said it is “to have a very clear roadmap”.

Furthermore, Aurangzeb said he saw “no reason to believe” that the IMF would not agree on the government’s privatisation agenda when they arrived in the country because ultimately, the Fund’s priorities aligned with Pakistan’s.

“I’m still hoping we will get into a staff-level agreement by the end of June or early July so we can move on to an end. IMF is means to an end, not an end in itself,” the finance minister said.

In March, IMF staff and Pakistani authorities reached an staff-level agreement for the second and final review, which was subsequently forwarded to the Fund’s Executive Board for final approval. Upon approval, Pakistan would have access to SDR 828 million (approximately $1.1bn).

Previous statements from both the IMF and Pakistani officials indicated that not only would the board convene on April 29, but it would also approve the release of the final tranche of $1.1bn under the SBA signed in June 2023.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Trump 2.0
Updated 07 Nov, 2024

Trump 2.0

It remains to be seen how his promises to bring ‘peace’ to Middle East reconcile with his blatantly pro-Israel bias.
Fait accompli
07 Nov, 2024

Fait accompli

A SLEW of secretively conceived and hastily enacted legislation has achieved its intended result: the powers of the...
IPP contracts
07 Nov, 2024

IPP contracts

THE government expects the ongoing ‘negotiations’ with power producers aimed at revising the terms of sovereign...
Rushed legislation
Updated 06 Nov, 2024

Rushed legislation

For all its stress on "supremacy of parliament", the ruling coalition has wasted no opportunity to reiterate where its allegiances truly lie.
Jail reform policy
06 Nov, 2024

Jail reform policy

THE state is making a fresh attempt to improve conditions in Pakistan’s penitentiaries by developing a national...
BISP overhaul
06 Nov, 2024

BISP overhaul

IT has emerged that the spouses of over 28,500 Sindh government employees have been illicitly benefiting from BISP....