The looming test

AS a new-found stability settles across the land all eyes are turning towards its durability. The current account has been registering persistent surpluses for a number of months now, and looks set to complete this fiscal year in positive territory if present trends continue. The primary balance on the fiscal account was also in surplus until December, with all indications suggesting it will comfortably meet the target set under the IMF programme by June. Inflation peaked in May last year and remains elevated, but its rate of increase has been trending downward since then, once again with all underlying indicators suggesting this movement will continue into the months ahead. Foreign exchange reserves had fallen to critically low levels in July 2023, but jumped massively in the same month on the back of an emergency bailout package including an IMF programme, and central bank deposits from the Kingdom of Saudi Arabia and the United Arab Emirates. From $4.7 billion, State Bank reserves jumped to above $8bn where they have remained since then, despite the repayment on a billion-dollar maturity earlier this month.