Pakistan borrows $439.17m in July to maintain foreign reserves

The country received $468.31 million in grants and loans in July 2018 from donors, commercial banks and multilateral institutions: sources

ISLAMABAD: Pakistan has borrowed $439.17 million in the first month of the current fiscal year to keep its foreign reserves above the two months import bill.

Sources informed that overall, the country received $468.31 million in grants and loans in July 2018 from donors, commercial banks and multilateral institutions.

Pakistan has to make a repayment of Rs601 billion in foreign loans during the current fiscal year 2018-9.

Presently, the country’s reserves are moving around $10.2 million and the new government is struggling to maintain foreign reserves and keep the economy afloat.

The minister for finance on Monday met with the Chinese ambassador and sources told this scribe that Asad Umar requested the ambassador to help the country on this issue.

China’s government has given $2 billion in loans to Pakistan in the last three months and sources said that the Chinese ambassador assured the Finance minister that China will help Pakistan on this matter.

China provided $289.91 million in July 2018, while France, Kuwait and Saudia Arabia loaned $10.97 million, $3.07 million and $16.50 million to Pakistan respectively.

On the other hand, Germany, UK and USA have provided loans worth $1.58 million, $9.19 million and $14.2 million in grants to Pakistan in July 2018.

In addition to this, Q block received $70 million from commercial banks during July on top of the $20 million borrowed from Noor Bank PJSC and $50 million from Suisse AG, UBL, and ABL.

Similarly, the multilateral institutions, Asian Development Bank (ADB), IDA, IFAD and OPEC Fund have also provided $52.87 million in loans to Pakistan.

Sources said that ADB has given $27.45 million, IDA $23.14 million, IFAD $1.88 million and OPEC Fund has provided a $0.41 million loan and grant to Pakistan in July 2018.

China has given $166.04 million loans for the Orange line Lahore project, $94.86 million for Sukkur Multan, $21 million for Havelian Thakor and $7.16 million for Neelum Jhelum Hydropower project, sources added.

Ministry of Finance in its briefing to FM in last week had stated that country’s economy is also facing challenges in the increased trend of the imposition of regulatory duties, which is why the new government will most likely have to take loans in order to increase reserves.

Sources added that the new government will not take any loans in the first 100 days but after that, Imran Khan’s government will surely approach the IMF or Beijing.

It is worth mentioning here that Pakistan has borrowed $40.3 billion in the first 60 years from different sources. The Pakistan People’s Party (PPP) in their third tenure (2008-2013) added $20.6 billion thus making the total debt to $60.9 billion. The Pakistan Muslim League Nawaz (PMLN) borrowed around $30 billion in this tenure; Pakistan debt has reached $91 billion as of June 2018.

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Shahzad Paracha
Shahzad Paracha
The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]
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