From Daily Times · Sajid Salamat · · 1m 20s
Pakistan's Reserves Rise But Risks Linger
Pakistan's foreign reserves hit $21.5bn but rate hikes signal economic fragility.
In brief
Pakistan's foreign reserves hit $21.5bn but rate hikes signal economic fragility. Pakistan's foreign reserves reached $21.5 billion while inflation rose, requiring careful fiscal management to avoid external debt crises. Originally reported by Daily Times.
Economic Scoreboard Improves
Pakistan's foreign exchange reserves crossed $21.5 billion, a substantial recovery from recent external financing crisis.
Credit Ratings Improve
S&P upgraded Pakistan to B with stable outlook, Moody's to B3 with stable outlook.
Exports and Remittances Rise
Goods and services exports reached $11.2 billion, workers' remittances $10.9 billion.
G-24 Chairmanship
Pakistan assumed chairmanship of the G-24, developing world's monetary affairs caucus.
Policy Rate Hike
State Bank raised policy rate by 50 basis points to 12 per cent on October 26.
Inflation Accelerates
Inflation rose under pressure from energy prices, food supplies and Middle East conflict.
IMF Programme Ends in 2027
Current IMF programme scheduled to conclude in 2.
Reserves Don't Equal Solvency
Gross reserves measure immediate liquidity but not long-term external solvency.
Economic Earnings Depend on Remittances
Pakistan depends almost as heavily on citizens' remittances as on domestic exports.
Foreign Direct Investment Remains Low
Foreign direct investment at $720 million for the quarter remains modest relative to $400 billion economy.
Rate Hike Shows Narrow Corridor
Rate hikes indicate narrow corridor between inflation and sustainable growth.
The key point
Pakistan's foreign reserves reached $21.5 billion while inflation rose, requiring careful fiscal management to avoid external debt crises.
