ISLAMABAD - International lenders have given only $1.04 billion loans to Pakistan in the first quarter (July to September) of ongoing fiscal year at the time when Islamabad is repaying massive loans that is depleting the foreign exchange reserves.

Pakistan had received over $1.04 billion loans under the head of foreign assistance in July-September of the current financial year. The received amount is only 10 percent of the estimated annual loans, which is $9.69 billion. The amount of loans would increase in the months to come as Pakistan had already approached International Monetary Fund (IMF), friendly countries like China and Saudi Arabia and would issuing bonds in the international market.

The country’s foreign exchange reserves are sharply draining due to massive repayment against previous loans. Pakistan foreign exchange reserves held by the central bank have fallen to $8.1 billion, which are enough for importing only one and half month’s imports. According to the government’s estimates, the country would need around $12 billion in ongoing fiscal year to meet the financing gap. Therefore, the country is negotiating with IMF, multilateral and bilateral sources to meet the massive financing gap.

According to the official figures of Economic Affairs Division, China had given loan of $299 million to Pakistan during first quarter of the ongoing fiscal year. China had committed to provide loan of $840 million to Pakistan during entire financial year. However, the government of Pakistan would likely ask the friendly country to deposit an amount in State Bank of Pakistan’s account to increase its depleting foreign exchange reserves. Prime Minister Imran Khan, in his upcoming visit to China from November 3, may make the demand.

Meanwhile, the Asian Development Bank (ADB) had disbursed $107.6 million to Pakistan during July to September period of the ongoing fiscal year as the Bank would provide loan of $1.38 billion within 2018-19. The government is making efforts to receive more loans from Asian Development Bank and World Bank to avert the balance of payment crisis. Finance Minister Asad Umar had recently said that Pakistan would acquire another $5 billion from Asian Development Bank (ADB) and World Bank (WB).

The Islamic Development Bank disbursed $200.5 million during first quarter of the year 2018-19, almost the entire amount was given on commercial terms for oil payments. Saudi Arabia gave only $16.5-million loan in the first three months. Prime Minister Khan would visit Saudi Arabia from Monday to seek further economic assistance from the Kingdom. Pakistan may also make same demand of to deposit an amount in State Bank of Pakistan’s account from Saudi Arabia as it would make to China.

Pakistan had taken loan of $240 million from the commercial banks during the period under review. The government had budgeted to receive $2 billion from the commercial banks as loan.

The USA disbursed $21.73 million, International Development Association (IDA) $37.15 million, France $31.16 million, Kuwait $3.1 million, UK $48.24 million, and Germany disbursed $2.62 million in July and September period of the year 2018-19.

The International rating agency, Moody’s has estimated Pakistan’s gross external financing needs for fiscal 2019 to be around $30 billion, of which $7-$8 billion are the government’s external repayments. The financing gap – which excludes foreign-exchange reserves – is likely to total $8-$9 billion; taking into account the government’s borrowing plans and expectations for capital inflows including foreign direct investment and portfolio flows.