ISLAMABAD - Pakistan has taken foreign loan of $7.4 billion in eight months of the current fiscal year to build its foreign exchange reserves that are declining mainly due to repayment of previous loans.
The government had budgeted foreign assistance of $22.817 billion for the current fiscal year including $7.5 billion from foreign commercial banks. However, it has received only 32 percent ($7.4 billion) of the annual projected amount in eight months (July to February) of the current fiscal year due to suspension of International Monetary Fund (IMF)’s loan programme that dried all the foreign inflows.
The inflows are expected to accelerate after revival of IMF’s programme. According to the data of ministry of Economic Affairs, the country received $3.85 billion from multilaterals and $950 million from bilateral, $900 million from foreign commercial banks, $1.166 billion from IMF and $538.4 million from Naya Pakistan Certificate during July-February period of the year 2022-23. The government has received $1.27 billion loan in the month of February this year mainly due to $700 million inflow from Chinese commercial bank. The country has further received one billion dollars from the Chinese bank, which would be depicted in next month’s data.
The Chinese loan inflow has helped in building the country’s foreign exchange reserves. The total liquid foreign reserves held by the country stood at $9.846 billion as of 10-Mar-2023. The break-up of the foreign reserves position showed that foreign reserves held by the State Bank of Pakistan are $4.319 billion and net foreign reserves held by commercial banks are $5.52 billion. “During the week ended on 10-Mar-2023, SBP’s reserves increased by $18 million to $4,319.1 million,” the State Bank of Pakistan stated on Thursday. Meanwhile, Pakistan is working to fulfill another prior action of the International Monetary Fund (IMF) to give written commitment from the friendly countries for external financing during the current fiscal year to revive the much needed loan programme.
Friendly countries including Saudi Arabia and United Arab Emirates (UAE) have pledged with Pakistan to deposit two billion dollars and one billion dollars respectively in State Bank of Pakistan’s account. Meanwhile, Qatar had shown interest in making huge investment by purchasing power plants. The data showed that the Asian Development Bank (ADB) disbursed $1.929 billion during the period under review compared to the budgeted $3.202 billion for the entire fiscal year.
The ADB disbursed $12.85 million in February 2023. China disbursed $54.93 million during the first quarter against the government budgeted estimates of $49.02 million for the current fiscal year, however, no money was received in October, November, December, January and February. Saudi Arabia disbursed $782.28 million against the budgeted $800 million. The USA disbursed $20.83 million during the period under review against the budgeted $32.49 million for the current fiscal year. Korea disbursed $19.79 million and France $27.36 million during the first eight months of the current fiscal year.
The IDA $1.089 billion against the budgeted $1.4 billion, IBRD $135.02 million against the budgeted $1.246 billion and Islamic Development Bank disbursed $16.81 million against the budgeted $3.38 million for the current financial year. The IsDB (short-term) disbursed $161 million in the current fiscal year. The AIIB disbursed $539.02 million in the current fiscal year so far