Pakistan's forex reserves likely to surge to three-month of imports cover by fiscal year end

Pakistan's foreign exchange reserves are anticipated to reach levels sufficient to cover three months of imports by the end of fiscal year, which is a crucial factor in credit re-profiling, Finance Minister Muhammad Aurangzeb announced Wednesday.

Speaking at the Economic Coordination Committee (ECC) meeting, Aurangzeb revealed that Pakistan is aiming for a single B rating.

He noted that the Karachi Interbank Offered Rate (KIBOR) is currently below 12%, with some entities securing loans at rates below the lending rate.

The minister highlighted that the recent interest rate cut, the fifth consecutive reduction, is designed to benefit the private sector and stimulate economic revival. He also reported that inflation has eased following government intervention, and measures will be implemented to control prices, particularly for essential items like chicken and pulses.

Aurangzeb shared positive economic indicators, including a 58% increase in auto sales, a 15% rise in petroleum sales, and a 5% growth in cement and fertilizer sales.

He also noted that the current account is in surplus for the first time in a decade, with inflation at a 6.5-year low of 4.9%. Additionally, Roshan Digital Account inflows have reached $9 billion.

The finance minister emphasized that these developments are laying the foundation for macroeconomic stability, which will serve as a launchpad for future growth.