Forex reserves may reach 9bn USD by June end: finance minister

Finance Minister Muhammad Aurangzeb provided an optimistic outlook on Tuesday, forecasting Pakistan’s foreign exchange reserves to climb to “anywhere between 9 to 10 billion US dollars” by the end of June 2024.

Speaking at the inaugural session of the seventh ‘Leaders in Islamic Business Summit’ in Islamabad, he emphasized that this projected position in June would significantly surpass previous levels, indicating improvement from the previous year.

Highlighting the importance of the International Monetary Fund (IMF) as a means to an end rather than an end in itself, Aurangzeb underscored the necessity of Pakistan’s entry into the Stand-By Agreement (SBA). He stressed the criticality of this decision, citing the nation’s vulnerability with only 15 days of import cover at one point.

During his recent visit to Washington, Aurangzeb noted that Pakistan received recognition for demonstrating the necessary discipline to adhere to the IMF program. He revealed ongoing discussions with the IMF for a longer and larger program, aimed at achieving macroeconomic stability and executing economic structural reforms.

Emphasizing the urgency for execution, Aurangzeb highlighted the need to transition from policy formulation to implementation. He identified energy sustainability as a key priority and acknowledged the challenges in tax enforcement, urging timely decisions and execution to address pending litigations.

Regarding privatization, Aurangzeb reiterated the government’s stance that it has “no business in being in business,” calling for stepped-up efforts to privatize state-owned enterprises (SOEs). He emphasized the need for a clear roadmap to exit IMF loans, expressing confidence in aligning the IMF’s priorities with Pakistan’s.

Aurangzeb expressed hope for a staff-level agreement with the IMF by the end of June or early July, facilitating the nation’s progress beyond the IMF program. Despite delays in previous agreements, he remained optimistic about reaching a consensus, anticipating approval for the final tranche of $1.1 billion under the SBA signed in June 2023.