$26 billion due in external payment, bulk to be ruled over: Governor SBP

KARACHI: Pakistan’s external payment liabilities were $26 billion, with $16 billion scheduled to be rolled over or refinanced, and $8 billion of the remaining $10 billion previously repaid, Governor State Bank Jameel Ahmed said on Monday while addressing the opening ceremony of Pakistan Literacy Week.

In the fiscal year 2022, Pakistan suffered instant inflation, a significant decline in foreign exchange reserves, remaining equivalent to just two weeks of imports– and 50% deprecation in exchange rate, Ahmed while reflecting on the economic challenges in recent years.

The difference between interbank and open market rates increased considerably. During that period, in response, the SBP implemented harsh policy measures, such as import restrictions and a large hike in interest rates.

These initiatives helped lower inflation to a low of 0.7% by March 2025. However, he cautioned that inflation was likely to climb again starting next month.

The governor noted that Pakistan’s current account, which was earlier in deficit, is now in surplus. He stated that despite all odds, the current account is still in surplus, and the currency rate has stabilized as a consequence of specific policy efforts.

The spread between interbank and open market exchange rates has also reduced.

Regarding the growth prospects, Ahmad stated that GDP growth for FY25 is likely to stay between 2.5% and 3.5%, but if the agriculture sector performs well, it might reach 4.2%.

He emphasized the SBP’s strategic focus on fostering financial literacy, noting that numerous activities will be held around the nation during Literacy Week. He also showed high faith in his squad, stating, “I trust my team up to 98%.”

Furthermore, focusing on the central bank’s financial and economic aims, the governor stated that the goal is to enhance financial inclusion to 75% by 2028, up from 64% now.

The governor stated that the current account was expected to produce a significant surplus for the year, reversing a $1.7 billion loss from the previous year, noting that the country’s foreign exchange reserves were set to top $14 billion by June 2025.