SBP governor says IMF deal bolstered forex reserves, external sector stability

• Remarks came Monday during flag-hoisting ceremony on August 14.
• Country's forex reserves held by SBP currently stand at $8.04 billion.
• SBP making strides in digital, green, Islamic banking: SBP governor.

KARACHI: Pakistan's $3 billion Standby Arrangement (SBA) with the International Monetary Fund (IMF) has increased the country's foreign reserves and fixed short-term concerns affecting the economy's external sector, State Bank of Pakistan (SBP) Governor Jameel Ahmad said Monday, according to The News.

Ahmad's remarks came Monday during the flag-hoisting ceremony to commemorate Pakistan's 77th Independence Day at the central bank's premises in Karachi.

"The nine-month stand-by arrangement agreed with the IMF has improved foreign reserves of the country and largely resolved near-term issues pertaining to the external sector of the economy," Ahmad said.

The country's forex reserves held by the SBP currently stand at $8.04 billion. Addressing the gathering, Ahmad recounted the extraordinary achievements of the central bank during the last 76 years; chief among them was gaining the confidence of Pakistanis.

In line with the best international practices, the SBP 's Monetary Policy Committee (MPC) is now an independent forum that decides about the monetary policy, taking into account medium-term inflation targeting and the country's economic conditions.

The SBP also keeps Parliament abreast of its targets and activities through annual and bi-annual reports since it is accountable to the people’s parliament and the public.

Besides, it also issues a Financial Stability Review (FSR) that highlights the main risks facing the financial system and assesses the resilience of the financial system to those risks, he said.

Ahmad highlighted that the world economy remained under pressure in the near past which also resulted in an increase in inflation in Pakistan. These conditions were further aggravated due to floods and delays in the IMF programme review.

The governor observed that the SBP was making significant strides toward digital banking, green banking, and Islamic banking.

He specifically mentioned issuing a licensing and regulatory framework for digital banks in line with international best practices, growth of fintechs, and practical efforts for the transformation of the banking system into Shariah-compliant banking.

Ahmad also termed the development of the next strategic plan, improvement in liquidity management, and Shariah governance framework under the third five-year strategic plan of the Islamic banking industry.

He paid rich tributes to Quaid-e-Azam Muhammad Ali Jinnah and his companions who despite adversities, led the freedom struggle and won an independent state for Muslims of the subcontinent.

He recalled the hostile circumstances the nascent state of Pakistan endured during its initial days and how it had to rely on others to perform financial and banking activities.

These unfavourable circumstances eventually culminated in the establishment of the SBP for the economic independence of the country.

The ceremony, attended by the senior management of the bank and a large number of SBP officials along with their families, commenced with the hoisting of the national flag by the Governor SBP amid the playing of the national anthem by a band of Pakistan Navy.

A smartly turned-out contingent of the Internal Bank Security Department (IBSD) presented the Governor with the Guard of Honour.

A choir consisting of students from the Garage School of Karachi presented heart-warming national songs, which were highly appreciated by the audience. The governor also planted a tree to commemorate the Independence Day of the country.

On this occasion, a special exhibition of Pakistani Postage Stamps titled 'Pioneers of Freedom', a series by the renowned artist Saeed Akhtar-was arranged in the SBP Museum.

The exhibition portrayed the pioneers of the freedom struggle who rose against foreign rule and bravely led the freedom movement. Ahmad also inaugurated a display of small-scale cultural dioramas (working 3D models with sound and movement) prepared by a respected artist Abdul Kareem Solangi (Pride of Performance), representing different cultural aspects of Pakistan.