ISLAMABAD, Mar 08 (NNI): State Bank of Pakistan Governor Jameel Ahmad has said the Ukraine war has pushed prices of goods which eventually led to inflation in Pakistan.
The governor was briefing the Senate Standing Committee on Finance — chaired by Senator Saleem Mandviwala — about the country’s current economic health, inflation, interest rates and foreign exchange.
During the meeting, Senator Mohsin Aziz said their government gave autonomy to the central bank but they did not use it, adding the inflation and the interest rate had reached its historic peak in the country.
The central bank’s governor informed the committee that the economy is currently facing many external and internal challenges and the Ukrainian war has increased prices of goods, which also led to inflation in Pakistan. He said this year’s current account deficit was estimated to be $10 billion.
Ahmad said the current account deficit is low due to the policy measures taken by the government and the State Bank, adding the current account deficit will remain up to $7 billion by the end of this fiscal.
The SBP Governor told the Senate Committee after bending over backwards to meet nearly every demand, Pakistan is on the cusp of finalizing an staff-level agreement with the International Monetary Fund (IMF).
Ahmed stated that Pakistan was very close to finalizing a broader financing agreement with the global lender.
He added that after the IMF deal, the US dollar will improve the foreign exchange reserves, saying the State Bank’s reserves will be $4.3 billion by the end of next week.
The SBP governor said annual inflation rate of this year is estimated to be 26.5 per cent, remittances this year has dropped by $2 billion and remittances have dropped to $16bn from $18bn.
Furthermore, he announced that the country’s foreign exchange reserves had gone up by $1.5 billion in just one month, bringing the total to $4.3 billion.
He expressed his confidence that foreign exchange reserves would continue to increase by June 30 of this year. NNI
