KARACHI: Governor of the State Bank of Pakistan (SBP), Jameel Ahmed has said that despite external debt servicing, the country’s foreign exchange reserves are strengthening, supported by healthy foreign inflows, and expected to reach $12 billion mark by the end of the month.
Talking to media at an event titled, “Enabling Green Financing and Green Bonds via Credit Enhancement Solutions,” organized by InfraZamin Pakistan, Governor SBP projected that the country is likely to achieve a GDP growth rate of 2.5 to 3 percent for the current year.
He informed that that all prerequisites set by the Asian Development Bank (ADB) have been met, and the country is set to receive $500 million in financing from ADB soon.
SBP-held foreign exchange reserves increase $18mn, now stand at $11.17bn
SBP Governor said that Pakistan is successfully managing its external debt obligations and despite external debt servicing Pakistan’s official foreign exchange reserves are expected to rise to $12 billion by the end of November.
He identified four key sources of foreign inflows, with remittances being the most significant and said that remittances from overseas Pakistanis are expected to reach $34 billion. In addition, inflows through Roshan Digital Accounts exceeded $200 million in October and Foreign Direct Investment (FDI) has also seen some growth, he added.
Governor said that the banking sector’s private credit uptake is increasing due to rising demand driven by economic expansion. He also noted that economic activities are expected to pick up further in the coming months, with exports growing at an annual rate of 13.5 percent.
While addressing the event, Governor SBP emphasized the need to substantially increase credit allocation to projects that enhance climate resilience and promote environmentally sustainable growth.
“It is essential that we leverage our financial sector’s potential to align with the global shift toward sustainability, thereby contributing to both our national priorities and international commitments,” he added.
The Governor’s address focused on two main themes i.e., Pakistan’s vulnerability to climate change and urgency of effectively tackling this challenge.
He contextualized Pakistan’s vulnerability to climate change, highlighting the progress made so far and the role of stakeholders, especially policymakers and the financial services industry, in developing viable solutions. The Governor highlighted the global urgency to address climate change, citing massive natural disasters such as the catastrophic floods in 2022, which caused economic losses of approximately $30 billion in Pakistan.
Copyright Business Recorder, 2024