Pakistan receives $500 million each from World Bank, ADB

KARACHI: Pakistan has received $1 billion in fresh loans from two international financial institutions for overcoming the shortfall in budgeted expenditures and fight the coronavirus pandemic.

“State Bank of Pakistan (SBP) has received $1 billion today – $500 million each from the Asian Development Bank (ADB) and the World Bank,” the central bank announced on Twitter.

The SBP’s foreign currency reserves have increased to over $11 billion or equivalent. The rupee appreciated Rs0.29 and closed at Rs167.36 against the US dollar in the inter-bank market after the receipts.

Pakistan has also received another $500 million in loans from the Asian Infrastructure Investment Bank (AIIB). This was stated by Ministry of Finance stating that the government is very grateful to its development partners for this critically needed support in such unprecedentedly difficult and uncertain time.

The country signed agreements for $500 million worth of loans from each of the three international financial institutions last week.

In April, the International Monetary Fund (IMF) provided an emergency loan of $1.4 billion to fight COVID-19, improve international payment capability and finance the budgeted expenditures.

The State Bank of Pakistan also said the current account posted a surplus of $13 million in May against a deficit of $350 million in April.

The current account deficit narrowed to $3.28 billion in the first eleven months of current fiscal year and declined sharply in May. The deficit reached a record-high of $20 billion deficit in fiscal year 2018.

During July-May, the deficit fell by 73.6 percent compared to $12.453 billion in the same period last fiscal year due to a sharp reduction in import bill as exports showed lacklustre growth.

According to Pakistan Bureau of Statistics (PBS), the export of goods fell to $20.9 billion, down from $22.5 billion in the last fiscal year, while imports fell to $38.9 billion from $47.8 billion last year.