ISLAMABAD - State Bank of Pakistan (SBP) Governor Jameel Ahmed on Wednesday said that Pakistan and International Monetary Fund (IMF) would soon reach a staff level agreement, which would revive the loan programme. He made these remarks during a meeting of the Senate Standing Committee on Finance, which was chaired by Saleem Mandviwalla. The Governor SBP informed that Pakistan was very close to finalizing a broader financing agreement with the IMF. He announced that the country’s foreign exchange reserves held by the central bank has 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. He further said that the economy is currently facing many external and internal challenges and the Ukraine 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. He 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. It was also informed that imports will also be revived with the revival of the IMF program. The Governor State Bank while admitting that the continuous deficit of the economy is due to the policy induced slow down in response to monetary policy tightening and administration measures to counter inflation and address external challenges. Senator Mohsin Aziz pointed out that around 4 to 5 million dollars are being smuggled every year. The committee sought details of amount of dollars smuggled to Afghanistan in the recent period. It was also noted that due to high international inter banking rates, has resulted in Hundi and black money business. “We can see the smuggling of dollar and black money business now being done through infants,“ remarked Senator Mohsin Aziz. The committee recommended to seriously address the issue of varying dollar rate of open market inter banking and black market and bring the rate inconformity so that everyone receives a fair price. Saleem Mandviwalla also emphasised that rupee trade with Afghanistan be immediately stopped which is also contributing to external deficit.
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