Pakistan receives $500m from AIIB
Pakistan has received $500 million from the Asian Infrastructure Investment Bank (AIIB), the Ministry of Finance stated on Tuesday.
"Government of Pakistan has today received $500 million from AIIB. The funds are deposited with the State Bank of Pakistan (SBP) and will augment our reserves," the ministry said in a post on its Twitter handle.
Earlier, Finance Minister Ishaq Dar had said that Pakistan would receive $500 million as co-financing for the BRACE development program from the AIIB. The BRACE (Building Resilience with Active Counteryclical Expenditures Program) is an Asian Development Bank financing programme to counter the social fallouts of economic crisis.
The development is crucial for the cash-strapped country, which has seen its foreign exchange reserves dwindle in recent months. The country's reserves stood at $7.8 billion as of November 18, barely enough to cover imports for a month. At the same time, falling reserves have increased worries over Pakistan's ability to meet debt obligations, and increased perceived default risks.
There has been growing uncertainty about the ability of Pakistan to meet external financing obligations with the country in the midst of an economic crisis and recovering from devastating floods that killed over 1,700 people.
However, in an analyst briefing after the monetary policy announcement on Friday, SBP Governor Jameel Ahmad said the country will repay its debt payments in a timely fashion and necessary inflows will be arranged from multilateral institutions along with certain rollovers.
The governor noted that $500 million from AIIB was expected to land in central bank reserves on Tuesday. He also said Pakistan will repay a $1 billion international bond on December 2, three days before its due date. The bond repayment, which matures on December 5, totals $1.08 billion, Ahmad told the briefing, according to two analysts who were present.
Separately, The ADB has also released $1.5 billion for Pakistan to support the economy and rehabilitate the affected people in the wake of recent floods. The development was shared by Federal Minister for Finance and Revenue Ishaq Dar on his Twitter handle last month. "ADB has released funds $1.5 billion to Pakistan under BRACE program for the credit of Government of Pakistan's account with State Bank of Pakistan (SBP)," said Dar. The funding will boost Pakistan's foreign exchange reserves position, which has worsened in recent months, leaving the country with just a few weeks of import cover and putting the currency under pressure.
Earlier, Regional Director South Asia Infrastructure World Bank Guangzhe Chen called on Minister for Finance and Revenue Senator Mohammad Ishaq Dar. Country Director World Bank Najy Benhassine, SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, Secretary Finance and other senior officers of Finance Division attended the meeting, said a press release.
The minister highlighted the current economic outlook of Pakistan's economy and apprised the delegation of various policy measures being undertaken by the present government to ensure the sustainable and inclusive economic growth and development by enhancing ease of doing business, encouraging exports and facilitating various sectors of the economy.
Ishaq Dar commended the developmental role of the World Bank in Pakistan and further added that Pakistan values the financial and technical assistance provided by the World Bank for the institutional reforms and economic development of the country.