The State Bank of Pakistan bought $27 billion from the market in three and a half years

In a meeting of the National Assembly Standing Committee on Finance, Governor State Bank Jameel Ahmad said that since January 2023, the State Bank has purchased $27 billion from the local open market. This amount was $3 billion more than his estimate given two months ago. In the current fiscal year alone, $4.5 billion was purchased.

Experts say that due to such a large amount of dollar purchases, the pressure on the rupee remained. If this purchase had not happened, the condition of the local currency could have improved somewhat. It was also revealed that the IMF program has not yet been able to produce the expected results in terms of non-debt investment and increasing foreign exchange earnings.

Talking about reserves, the State Bank currently has about $16 billion, including $12 billion in cash deposits from Saudi Arabia and China. Jameel Ahmad said that despite repaying $5 billion in loans in April, the reserves are increasing week by week and will soon cross the $17 billion mark.

Finance Minister Muhammad Aurangzeb told the committee that the final approval for issuing Panda Bonds from China has been received and bonds worth $250 million will be brought to the market in the next 10 days. He also said that despite the situation in the Middle East, Pakistan’s external accounts are currently safe and the current account deficit target will be achieved this year.

Regarding the pace of the economy, the Governor State Bank said that the growth rate in the January-March quarter is likely to be above 4 percent, which is better than the 3.1 percent of last year. However, rising energy prices have become a cause for concern regarding inflation.

A key moment in the meeting came when Member of Parliament Javed Hanif wanted to know what the interest rate was on the new $3 billion loan taken from Saudi Arabia to repay the UAE’s $3.5 billion debt. But the Chairman of the committee, Syed Naveed Qamar, did not allow him to ask this question, which many people found strange.