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KARACHI: The Governor, State Bank of Pakistan,
Yaseen Anwar has said that Pakistan will not face
any risk in making repayments to the
International Monetary Fund (IMF). "We face no risk in being able to make next year's
IMF payments from our adequate reserves", he
said in a rebuttal to a story published in the Wall
Street Journal (WSJ) on May 29, 2012. In his letter, published in the WSJ Thursday, he
clarified that the decline in our projected reserves
will be partially offset by an increase in
remittances which will exceed $ 13 billion this
fiscal year, and additional foreign direct
investment in the pipeline that includes US company investments in the power sector. He said that the entry of new foreign banks,
increased small and medium-size enterprise
lending to increase employment, huge potential
for the agriculture sector and the export potential
for dairy products as the fourth largest milk
producer in the world, and the development of capital markets to support housing finance are
the positive developments in the country's
economy. He pointed out that Pakistan's current banking
restructuring and our successful branchless
banking strategy is bringing the "unbanked" into
the banking sector to increase financial inclusion.
The State Bank of Pakistan had stated that gross
domestic product is expected to be closer to 4% this year than the 3% as reported by WSJ, he
explained. "It would have been nice to see a more positive
light on these factors which will, in my view, be a
positive toward alleviating the manageable
stresses going forward. I see the glass half full
and am optimistic about the year ahead", the
Governor's letter to WSJ said and added: "The article "Pakistan Bank Sees Financial
Challenges" (World News, May 29) doesn't fully
reflect the economic story I conveyed in my
interview with the Journal". Separately, he said that despite economic
challenges, Pakistan is not facing a situation
which requires emergency external assistance.
The fiscal deficit and the lack of external financing
will continue to challenge Pakistan, especially the
central bank, he said. "Let me assure you that Pakistan will not stumble into a situation that
requires emergency external assistance,? he
added. Dispelling the impression created by some foreign
and local media reports regarding pressures on
the country's foreign exchange reserves and
exchange rate, the SBP Governor said: "It will be
challenging, but manageable.? He pointed out
that like most other central banks, SBP only undertakes calibrated interventions to diffuse
volatility as appropriate. In recent weeks, the
movement in the exchange rate has been
somewhat sentiment driven compounded by
lumping up of some scheduled payments, rather
than any excessive demand & supply mismatches prevailing in the market. "The State Bank is
watching the situation closely and the recent
exchange rate movements have been excessive
with the market overreacting" SBP Governor
added. He said that during the first ten months of FY
2011/12, remittances from overseas Pakistanis
rose by 20.2% to $ 10.88 billion, which helped
the Balance of Payments (BoP) despite widening
of the trade deficit. Pakistan's fiscal challenges are well known and
documented, he said, adding that this spillover to
the rest of the economy is equally clear. He
explained that at the start of the year (July 2011),
external conditions appeared daunting due to
rising oil prices and lack of external financing. Despite all odds Pakistan has fared well in the first
eleven months of the current FY with not only
successfully paying back IMF obligations to the
tune of $ 1.2 billion and other Debt obligations
equaling $ 1.7 billion to date, yet SBP's Liquid
Reserves are at stable levels of around $ 11.5 billion, much better and contrary to most
analysts' earlier assessment at the beginning of
the fiscal year. Despite domestic challenges, key emerging
market countries (China and Turkey) have shown
keen interest in opening bank branches in
Pakistan, he said, adding that unlike European
Union (EU), Pakistan's banking system has been
very resilient, profitable and robust. As stated to the Wall Street Journal and repeated,
"I see the glass half full and optimistic about the
year ahead as Pakistan's economy is projected to
grow 4.3 percent in the next fiscal year (FY13)",
the SBP Governor added.
Sufficient reserves to make IMF repayments: SBP Governor
repayment wont make any drastic crysis as reserved are sufficient
close to 4% growth expected
Good news indeed
Yaseen Anwar has said that Pakistan will not face
any risk in making repayments to the
International Monetary Fund (IMF). "We face no risk in being able to make next year's
IMF payments from our adequate reserves", he
said in a rebuttal to a story published in the Wall
Street Journal (WSJ) on May 29, 2012. In his letter, published in the WSJ Thursday, he
clarified that the decline in our projected reserves
will be partially offset by an increase in
remittances which will exceed $ 13 billion this
fiscal year, and additional foreign direct
investment in the pipeline that includes US company investments in the power sector. He said that the entry of new foreign banks,
increased small and medium-size enterprise
lending to increase employment, huge potential
for the agriculture sector and the export potential
for dairy products as the fourth largest milk
producer in the world, and the development of capital markets to support housing finance are
the positive developments in the country's
economy. He pointed out that Pakistan's current banking
restructuring and our successful branchless
banking strategy is bringing the "unbanked" into
the banking sector to increase financial inclusion.
The State Bank of Pakistan had stated that gross
domestic product is expected to be closer to 4% this year than the 3% as reported by WSJ, he
explained. "It would have been nice to see a more positive
light on these factors which will, in my view, be a
positive toward alleviating the manageable
stresses going forward. I see the glass half full
and am optimistic about the year ahead", the
Governor's letter to WSJ said and added: "The article "Pakistan Bank Sees Financial
Challenges" (World News, May 29) doesn't fully
reflect the economic story I conveyed in my
interview with the Journal". Separately, he said that despite economic
challenges, Pakistan is not facing a situation
which requires emergency external assistance.
The fiscal deficit and the lack of external financing
will continue to challenge Pakistan, especially the
central bank, he said. "Let me assure you that Pakistan will not stumble into a situation that
requires emergency external assistance,? he
added. Dispelling the impression created by some foreign
and local media reports regarding pressures on
the country's foreign exchange reserves and
exchange rate, the SBP Governor said: "It will be
challenging, but manageable.? He pointed out
that like most other central banks, SBP only undertakes calibrated interventions to diffuse
volatility as appropriate. In recent weeks, the
movement in the exchange rate has been
somewhat sentiment driven compounded by
lumping up of some scheduled payments, rather
than any excessive demand & supply mismatches prevailing in the market. "The State Bank is
watching the situation closely and the recent
exchange rate movements have been excessive
with the market overreacting" SBP Governor
added. He said that during the first ten months of FY
2011/12, remittances from overseas Pakistanis
rose by 20.2% to $ 10.88 billion, which helped
the Balance of Payments (BoP) despite widening
of the trade deficit. Pakistan's fiscal challenges are well known and
documented, he said, adding that this spillover to
the rest of the economy is equally clear. He
explained that at the start of the year (July 2011),
external conditions appeared daunting due to
rising oil prices and lack of external financing. Despite all odds Pakistan has fared well in the first
eleven months of the current FY with not only
successfully paying back IMF obligations to the
tune of $ 1.2 billion and other Debt obligations
equaling $ 1.7 billion to date, yet SBP's Liquid
Reserves are at stable levels of around $ 11.5 billion, much better and contrary to most
analysts' earlier assessment at the beginning of
the fiscal year. Despite domestic challenges, key emerging
market countries (China and Turkey) have shown
keen interest in opening bank branches in
Pakistan, he said, adding that unlike European
Union (EU), Pakistan's banking system has been
very resilient, profitable and robust. As stated to the Wall Street Journal and repeated,
"I see the glass half full and optimistic about the
year ahead as Pakistan's economy is projected to
grow 4.3 percent in the next fiscal year (FY13)",
the SBP Governor added.
Sufficient reserves to make IMF repayments: SBP Governor
repayment wont make any drastic crysis as reserved are sufficient
close to 4% growth expected
Good news indeed
