The State Bank of Pakistan (SBP) has announced an increase of $393 million in its foreign exchange reserves, bringing the total to $4.46 billion. In an official statement, the central bank stated that this rise occurred on June 30, 2023. The boost in reserves is seen as a positive development for the country’s economy.

At the same time, the overall liquid foreign reserves held by Pakistan now stand at $9.74 billion, with commercial banks accounting for $5.28 billion of that amount. These figures reflect the country’s efforts to stabilise its foreign reserves and strengthen its financial position.

This increase in foreign exchange reserves is largely attributed to Pakistan’s recent agreement with the International Monetary Fund (IMF). The country signed a staff-level agreement with the IMF, amounting to $3 billion, for a duration of 9 months. The IMF’s “Stand-By Arrangement” with Pakistan has been successfully concluded, signaling a positive outlook for the nation’s economic stability.

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Nathan Porter, the IMF Mission Chief, commended Pakistan for its commitment to achieving its economic goals and acknowledged the parliament’s crucial role in this accomplishment. He emphasised that the staff-level agreement under the Stand-By Arrangement is a significant milestone.

The agreement is now awaiting final approval from the IMF’s executive board, which is anticipated to occur in mid-July. Once approved, Pakistan will be eligible to receive the $3 billion loan from the IMF.

In his remarks, Porter highlighted the parliament’s efforts to enhance tax revenues, an essential component of Pakistan’s economic growth. The parliament has taken noteworthy steps to increase funds allocated to the Benazir Income Support Programme and has also limited tax exemptions.

These measures are expected to lead to an increase in tax revenues, which, in turn, could result in a primary surplus of 0.4 per cent for Pakistan’s economy. The additional funds generated through these increased tax revenues can then be directed towards crucial social sectors.

Overall, the increase in foreign exchange reserves for the State Bank of Pakistan is an encouraging sign for the country’s economic stability. With the IMF agreement on the horizon and the parliament’s dedication to boosting tax revenues, Pakistan is poised to make significant strides in its economic development.

The final approval of the agreement by the IMF’s executive board will mark a crucial milestone in Pakistan’s journey towards a more prosperous future.