Finance Minister confident of reserves reaching $10bn by June

As the government expedites measures to address prevailing dire economic conditions, Finance Minister Muhammad Aurangzeb Tuesday provided a glimmer of hope saying that the country’s foreign exchange reserves will reach $10 billion by June this year. “The country’s foreign exchange reserves have increased […] and will reach $10 billion by June [this year],” Aurangzeb said while speaking at the 2024 Islamabad Business Summit. Stressing the need for reforms in the energy sector, the finance czar underscored the significance of the “essential” privatisation of loss-making enterprises. On the issue of the country seeking another bailout programme from the International Monetary Fund (IMF), the finance czar termed it “crucial” and remarked that reaching out to the Washington-based lender is often the “last option” for a country. His remarks come days after Islamabad made a formal request to the IMF for a new bailout package in the range of $6 to $8 billion under Extended Fund Facility (EFF) with the possibility of augmentation through climate financing. In an interview a day earlier, the FinMin noted that the IMF has been very receptive in terms of agreeing to consider a larger, longer programme. However, the exact size and time-frame will only be determined after evolving consensus on the major contours of the next programme in May 2024. Pakistan has shown its interest and also made a request to dispatch the IMF review mission in May 2024 to firm up details of the next bailout package of three years period under EFF programme. Although, Pakistani authorities are pitching a rosy picture of the economy the IMF, in its latest Regional Economic Outlook (REO), released by the Middle East and Central Asia (ME&CA) department stated that Pakistan’s external buffers deteriorated, mostly reflecting ongoing debt service, including Eurobond repayments.