ISLAMABAD - Pakistan would receive $300 million from Asian Development Bank (ADB) within next few days that would build the country’s foreign exchange reserves.
The ADB’s board of directors would meet on Friday to consider approving Proposed Policy-Based Loan for Subprogram 2 - Trade and Competitiveness Program (Pakistan). This would be the second tranche under the $800-million Trade and Competitiveness Support Programme. Earlier in August last year, the ADB had approved a $500 million loan as first tranche for budgetary support to Pakistan, restoring policy-based lending after keeping it suspended for over two years due to the deterioration in macroeconomic conditions.
The inflow from the ADB would help in building the country’s foreign exchange reserves. The total liquid foreign reserves held by the country stood at $20.085 billion despite massive repayment against previous loans. Foreign reserves held by the State Bank of Pakistan are $12.931 billion and net foreign reserves held by commercial banks are $7.154 billion. The SBP’s foreign exchange reserves had increased to $12.9 billion, their highest level since February 2018. The surplus current account is helping in maintaining the country’s foreign exchange reserves.
According to the data of Ministry of Economic Affairs, the ADB had given $637 million to Pakistan in first quarter (July to September) of the current fiscal year. The ADB’s loan of $637 million is part of the country’s overall loan that it had received $2.734 billion total external inflows from multiple financing sources in July-September of the year 2020-21.